Japanese giant SoftBank has seen its share price fall sharply today, due to its exposure to continued US-tech selloffs.
The company opened trading on Monday 2.6% down, and ended it with a 7.15% deficit – SoftBank’s biggest tumble since March. It represents around $8.9 billion.
The drop came after the NASDAQ fell 5% on Thursday; a troubling indicator for the American tech industry. Friday saw a further 1.3% devaluation.
SoftBank, which has made prestige investments in tech firms like Uber, WeWork, Lemonade, Amazon, Netflix and Boston Dynamics, is particularly exposed to a drop in US share values. SoftBank also holds billions of dollars in so-called “call options,” derivatives which give it a first-come right to buy more stock.
SoftBank’s shares are still up 20% on last year, when failures at WeWork, Zume and other ventures rocked the company’s investment plans. The head of its Vision Fund was also embroiled in a “honey-pot” scandal that forced SoftBank’s C-suite to retreat into damage-control mode.
But today’s drop may force SoftBank to sell shares or call options, as America’s tech industry continues to reel from the effects of the COVID-19 pandemic.
“When there is a tech bubble, Masayoshi Son is usually not too far away from the action,” wrote market strategist Amir Anvarzadeh of SoftBank’s outspoken and risk-loving leader.