TOKYO (BLOOMBERG) - SoftBank Corp's brokerage unit plans to do something that may be a first in capital markets. It will allow individuals in Japan to participate in initial public offerings (IPO) with as little as a 1,000 yen note (S$13) - worth a bit less than a 10 US dollar bill.
One Tap BUY Co, controlled by the wireless unit of investment giant SoftBank Group Corp, is preparing to start offering such sales as early as March 2020 after obtaining the necessary regulatory approvals. This will mark the first time that investors will be able to subscribe to an IPO by investment amount rather than specified number of shares, said One Tap BUY chief executive officer Masaaki Uchiyama.
"When you buy food or fuel your car, it's easier to specify the amount of money you want to spend rather than the volume," Mr Uchiyama said in an interview. "The only thing investors want to know is how much they can gain from US$10."
SoftBank is going up against competition from Line Corp and Rakuten Inc in the race to tap individuals through financial services. Line started an online brokerage with Japan's biggest bank, Nomura Holdings Inc, this week, while Rakuten last month announced it will start lending and issuing credit cards in the United States. All three are aiming to create and expand new markets, targeting younger and less well-off investors.
SoftBank owns 46 per cent of One Tap BUY, while Mizuho Securities holds 13 per cent. Mr Uchiyama, who joined the smartphone-based brokerage in 2016 after stints at the predecessors of SMBC Nikko Securities and Accenture, became the CEO in July.
One Tap BUY will seek an IPO of its own in the next three to five years, the CEO said. Ahead of that, the company plans to raise as much as three billion yen from investors by March 2020 to expand its brokerage operation, he added.
"As long as we are a unit of SoftBank, we are supposed to seek to become a unicorn," Mr Uchiyama said.