SoftBank shares tumble after Vision Fund reports another big loss
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SoftBank shares are still up 11 per cent from the start of the year.
PHOTO: REUTERS
TOKYO – Shares in Japan’s SoftBank Group plunged on Monday after the company reported a heavy loss at its Vision Fund investment arm for a third consecutive quarter.
The shares sank 13 per cent in early afternoon trade – heading for their biggest one-day loss in more than 2½ years.
Analysts said, however, that the share price slide was in part a pullback from a steep rally that had been driven by hopes of more share buybacks. As at Friday’s close, SoftBank shares had gained more than 40 per cent since October.
“Various expectations, including another round of share buybacks, had pushed the share prices higher, and now they are in an adjustment phase,” SBI Securities analyst Shinji Moriyuki said.
Just a day before Friday’s quarterly results, SoftBank announced the completion of its plan to spend 400 billion yen (S$3.94 billion) to buy back its own shares.
Jefferies analyst Atul Goyal said in a note to clients: “We were looking for another round of buyback announcements, but there was none.”
Market specialists said worries about weakness in technology stocks are another factor weighing on shares in SoftBank, which bets heavily on the growth of high-tech companies.
“The outlook for information technology companies is dim amid the slowing global economy,” said research department general manager Shigetoshi Kamada at Tachibana Securities.
“Expectations for SoftBank Group’s growth have been shrinking as there is a concern that the value of its portfolio companies may not grow in this environment.”
The Vision Fund logged investment losses of 1.38 trillion yen for the three months to Sept 30 as the value of its portfolio continued to slide.
But SoftBank as a whole reported its first quarterly profit in three quarters, buoyed by paring some of its stake in China’s Alibaba Group Holding.
SoftBank shares were still up 11 per cent from the start of the year, far outperforming the tech-heavy Nasdaq’s 27.6 per cent slide and the Nikkei average’s 2.6 per cent dip. REUTERS
