SoftBank shares jump 10%, shaking off record loss

TOKYO – Shares in SoftBank Group gained 10 per cent in morning trading in Tokyo on Friday (May 13) as the market shook off a record loss, which had been widely flagged, at its Vision Fund unit.

“Alibaba remains the anchor asset. As long as that company does not deteriorate, a trading range for SoftBank between 4,500 yen and 5,500 yen is probably where it will be,” said Redex Research analyst Kirk Boodry.

The bounce followed a late-day rally in United States stocks overnight, with the S&P 500 and Nasdaq Composite closing roughly flat. Tech stocks including flea market app operator Mercari and e-commerce giant Rakuten also rose in Tokyo.

The rebound came as SoftBank founder and chief executive Masayoshi Son on Thursday pledged to scale back investing activity and preserve cash as the market downturn hammered his technology portfolio.

“When it rains, you open an umbrella,” the billionaire told a news conference, pointing to SoftBank’s US$23 billion (S$32 billion) cash position and 20.4 per cent loan-to-value ratio, which compares net debt with the equity value of holdings.

Mr Son’s reduction of spending, which follows a drop off in initial public offering activity that had allowed SoftBank to recycle funds into new investments, came even as he outlined his belief that valuations would continue to climb in the longer term.

“Several investors observed that (Softbank) making aggressive investments in up-markets and then becoming defensive during down-markets makes it essentially a momentum investor,” Jefferies analyst Atul Goyal wrote in a client note.

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