Market Overview

SoftBank Loses $15B Market Valuation This Week As Investors Concerned Over Exposure To US Tech Stocks

SoftBank Loses $15B Market Valuation This Week As Investors Concerned Over Exposure To US Tech Stocks

Softbank Group Corp (OTC: SFTBY) ADR’s have dropped around 13% since the beginning of the month.

According to the Financial Times, the company has lost $15 billion in market cap this week alone, as its shares tank in Tokyo on investor concerns related to its exposure to United States tech stocks. However, on a year to date basis, Softbank ADR’s remain up around 23%.

What Happened:  Softbank has a massive investment in US-listed tech stocks. The Japanese conglomerate’s portfolio includes investments of around $3.9 billionin large tech companies.

Softbank disclosed that it had purchased over a $1 billion worth of Amazon Inc (NASDAQ: AMZN) stock before June 30. Some other tech stocks owned by Softbank include Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG), Adobe Inc (NASDAQ: ADBE), Tesla Inc (NASDAQ: TSLA), Netflix (NASDAQ: NFLX), and Uber Technologies (NYSE: UBER).

Why It Matters: Two days ago, FT reported that Softbank was a “mystery whale” that led an upward rally of tech stocks in the past. The company held an aggressive stance with a derivative-based strategy and massive exposure to tech stocks.

And with the drag in tech stocks, investors have witnessed significant erosion in wealth. The high-risk investment strategy gained traction in the past few months with a renewed vigor on option premiums that is focused on individual U.S. tech stocks, FT noted.

The report also claimed that Softbank has a $30 billion notional exposure on call options.

Price Movement:  Softbank ADRs fell 7.78% and were quoting $27.02 at the end of the trading session on Tuesday.

Photo courtesy: Kirakirameister via Wikimedia


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Posted-In: Masayoshi Son tech stocks The Financial TimesNews Markets Tech Media

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