Softbank Offloads Stake In This Pandemic Favorite As Losses Weigh

Softbank Offloads Stake In This Pandemic Favorite As Losses Weigh
  • Softbank Group Corp SFTBF SFTBY has sold its entire stake in Sinch AB CLCMF following a share price collapse of more than 90% in the Swedish cloud-based platform provider. 
  • Sinch plummeted 93% from a peak in September 2021 following disappointing earnings reports, Bloomberg reports.
  • The stock is also among the most shorted in Europe.
  • In 2020, Sinch became an investor favorite as pandemic lockdowns fueled demand for its messaging services. 
  • Investors also cheered its aggressive pace of acquisitions.
  • The report added that Softbank, which acquired a tenth of Sinch in November 2020, sold its remaining stake of 5% to Sinch's co-founder and interim CEO Johan Hedberg and Neqst D2 AB, a firm connected to the company's Chair Erik Froberg. 
  • The stake acquisition by Sinch's largest shareholder and the firm's co-founder could partially offset the potentially harmful aspect of the Softbank sale, Morgan Stanley said.
  • Softbank started laying off employees at its loss-making Vision Fund.
  • Earlier, Softbank founder Masayoshi Son had shared cost-cut intentions at his conglomerate and the Vision Fund investment arm after a record $23-billion loss. Most of the losses came from a plunge in the valuations of portfolio companies, including South Korea's Coupang, Inc CPNG and DoorDash, Inc DASH.
  • Price Action: SFTBF shares were down 0.76% at $34.54 at the last check Friday.

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