Tech giant SoftBank’s shares get hit as Alibaba and Didi see stock slide

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  • The share price of the Japanese tech giant fell from 5201 yen ($46) to 5103 yen on the Tokyo stock market.
  • At one point, the shares fell to 5,062 yen, their lowest level since June 2020.
  • Portfolio companies including Alibaba, Arm and Didi Chuxing are facing a period of uncertainty, which has affected their market value.

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Shares of SoftBank Group fell more than 8% on Monday as the value of its portfolio companies continued to fall.

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The share price of the Japanese tech giant fell from 5201 yen ($46) to 5103 yen on the Tokyo stock market. At one point, the shares fell to 5,062 yen, their lowest level since June 2020.

The fall in SoftBank’s share price, which marks the seventh consecutive day of losses, comes amid a period of uncertainty around some of the company’s biggest bets and a broader regional sell-off of tech shares in Asia.

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Chinese e-commerce firm Alibaba – SoftBank’s most valuable company – saw its market cap drop by several billion dollars on Monday after the company announced a restructuring.

Alibaba’s Hong Kong-traded shares fell more than 8% after it revealed plans to create two new units to house its core e-commerce businesses — international digital commerce and China digital commerce — and become more agile. To become and accelerate development. It also said Deputy Chief Financial Officer Toby Xu would become the new Chief Financial Officer from April.

Alibaba is facing difficulties on several fronts, including increased competition, a slowing economy and regulatory action.

Meanwhile, SoftBank-backed ride-hailing firm Didi Chuxing announced last week that it plans to de-list from the New York Stock Exchange less than six months after its IPO. The Chinese firm said it plans to re-list on the Hong Kong Stock Exchange.

Shares of Didi have fallen 57% since its IPO on June 30, and closed Friday at $7.80.

In another blow to SoftBank, the sale of its Cambridge, UK-based chip designer arm to Nvidia doesn’t seem likely. Experts say global regulatory scrutiny around deal intensifies The deal is now “highly unlikely” to go through.

SoftBank initially agreed to sell the company for $40 billion, but The deal price has gone up According to Businesshala, Nvidia’s share price jumped after the jump to nearly $74 billion. As such, the company misses out on a significant payday if the deal goes through.

SoftBank in ‘the middle of the blizzard’

Last month, SoftBank reported a quarterly loss as its Vision Fund unit lost $10 billion from a decline in the share price of its portfolio companies.

Even as the value of its assets fell, SoftBank said its stock was undervalued and pledged to spend up to 1 trillion yen to buy back about 15% of its shares.

While CEO Masayoshi Son has compared SoftBank to a “golden egg” goose, the most recent results underscore the headwinds for the investment business.

“We are in the middle of a blizzard,” Son said at a news conference at the time, adding that he was “not proud” of the Vision Fund’s performance in the quarter. Yet he said the company is taking steady steps to double the number of “golden eggs” compared to last year.

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