SoftBank Group closed some 7% down as the Japanese conglomerate’s bets on equity derivatives tied to listed platform businesses made investors uneasy amid a decline in markets.
Shares dropped below 6,000 yen for the first time in 2 weeks to 5,881 yen. The group was the biggest loser in percentage terms on the benchmark index, which shut down 0.5%.
The Japanese financial powerhouse has spent billions of dollars purchasing shares in technology companies such as Amazon since it parks money generated by a massive asset sale programme.
The group has also made significant choices purchases in tech companies, sources familiar with the matter told journalists, in an aggressive bet by CEO Masayoshi Son on increasing tech stocks.
The group has made $4 billion in trading gains from those bets, the Financial Times reported.
SoftBank has declined to comment on the transactions.
The team often hedges its exposure and it is uncertain how much profit will be delivered by the transactions, which underscore Son’s undiminished risk appetite even as some analysts warn of sky-high valuations.
Another Japanese billionaire, Yusaku Maezawa, who sold his online fashion retailer Zozo to SoftBank last year, stated on Twitter he had been “dazzled” by the markets and dropped 4.4 billion yen (approximately $41 million) betting on stocks.
SoftBank’s shares are promoted by a record share buyback in recent months but the group has indicated those purchases will impede, providing less support for the stock.
The team at Platform Executive hope you have enjoyed the ‘[post_title]’ article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Jonathan Landay. Editing by Steve Orlofsky.
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