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SoftBank's massive IPO flops in market debut

Shares in the Japanese company's mobile telecommunications unit plummeted 15% in Tokyo on their first day of trading.

Posted: Dec 20, 2018 6:10 AM
Updated: Dec 20, 2018 6:43 AM

SoftBank's blockbuster IPO has flopped in its market debut.

Shares in the Japanese company's mobile telecommunications unit plummeted 15% in Tokyo on Wednesday, their first day of trading. The stunning plunge wiped out billions of dollars in market value.

The business is one of Japan's biggest wireless carriers and has provided the foundation for SoftBank CEO Masa Son's vast tech empire. By listing a big chunk of it, SoftBank Group (SFTBY) raised about $23.5 billion.

That makes it Japan's biggest ever stock float — and the world's second largest after Alibaba's (BABA) $25 billion listing in New York in 2014.

Strong demand from investors for a piece of the mobile business had prompted SoftBank to increase the number of shares it was selling. But it went public at a tough time for stocks: Japan's benchmark Nikkei index has fallen 7% since the start of December and is down about 14% from its recent high in early October.

SoftBank's mobile business, which has a market value of about $55 billion, also suffered some negative headlines this month. It suffered an embarrassing service outage on December 6 and said last week it's reviewing whether to remove equipment made by Chinese manufacturer Huawei from its network, a potentially costly move.

The CEO of SoftBank's mobile division, Ken Miyauchi, blamed the disappointing debut on poor market conditions. At a news conference after the market closed, he said that SoftBank had originally planned the IPO for September or October, before delaying it until December.

Fears of a price war

Japanese mom-and-pop investors, who bought up most of the shares in the IPO, were dumping the stock on the first day partly over fears of a damaging price war, according to analysts.

Japan's biggest wireless carrier, NTT Docomo (DCMYY), will slash the prices of its cellphone plans by as much as 40% next year after pressure from the Japanese government. Softbank is expected to follow suit.

Travis Lundy, an analyst at investment research platform Smartkarma, said the main reason for investors to buy the stock is because it pays a 5% dividend, which is large by Japanese standards. If a price war hits earnings, that dividend could come under threat.

Listing the mobile business is a key part of Son's efforts to reposition SoftBank as a global tech investor. The move splits the company in two, allowing investors to choose between its mobile unit and its tech investment business, which includes a big stake in Alibaba.

Son, SoftBank's billionaire founder, has become a major player in the global tech industry after launching the almost $100 billion Vision Fund last year. But the fund's heavy ties to Saudi Arabia came under scrutiny in October following the murder of Saudi journalist Jamal Khashoggi.

The Saudi sovereign wealth fund is the biggest single investor in the Vision Fund.

Son expressed "strong regret" last month over the killing of Khashoggi, but said it would maintain its ties with Saudi Arabia.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 514171

Reported Deaths: 10285
CountyCasesDeaths
Harrison34920557
DeSoto33270432
Hinds32652642
Jackson24876391
Rankin22516404
Lee16366245
Madison14932283
Jones14129247
Forrest13785260
Lauderdale12279324
Lowndes11314193
Lamar10663140
Pearl River9720244
Lafayette8855143
Hancock7839132
Washington7553169
Oktibbeha7216138
Monroe7036179
Pontotoc7003109
Warren6872178
Panola6768135
Neshoba6732210
Marshall6686142
Bolivar6451151
Union640898
Pike5933156
Alcorn5887107
Lincoln5533136
George510380
Prentiss505385
Tippah492783
Itawamba4857107
Scott478199
Adams4771125
Tate4765117
Leflore4736144
Copiah457095
Yazoo456692
Simpson4554117
Wayne443172
Covington434695
Sunflower4315106
Marion4279112
Coahoma4238109
Leake414090
Newton395782
Tishomingo384894
Grenada3777109
Stone365766
Jasper340866
Attala338790
Winston317892
Chickasaw316167
Clay312578
Clarke301295
Calhoun285949
Holmes271889
Smith269452
Yalobusha244247
Tallahatchie232053
Greene224749
Walthall221866
Lawrence219141
Perry213456
Amite209857
Webster206248
Noxubee188743
Montgomery181857
Carroll174941
Jefferson Davis173843
Tunica163339
Benton153139
Kemper145041
Choctaw136727
Claiborne134439
Humphreys132139
Franklin126029
Quitman107628
Wilkinson106139
Jefferson96934
Sharkey65321
Issaquena1957
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Alabama Coronavirus Cases

Cases: 845761

Reported Deaths: 16119
CountyCasesDeaths
Jefferson1161862004
Mobile742411381
Madison53315732
Shelby38351369
Baldwin38104589
Tuscaloosa36052641
Montgomery34492781
Lee25590263
Calhoun22598518
Morgan22459406
Etowah20026518
Marshall18790316
Houston17741425
St. Clair16904358
Limestone16153219
Cullman16067303
Elmore15912294
Lauderdale14991306
Talladega14209299
DeKalb12985269
Walker12067380
Blount10729192
Autauga10526157
Jackson10170194
Coffee9425192
Colbert9341208
Dale9024192
Tallapoosa7273201
Russell708865
Chilton7042170
Escambia6956143
Covington6943195
Franklin6338108
Chambers5785142
Marion5413130
Dallas5295209
Pike5123109
Clarke484886
Lawrence4831129
Winston4780110
Geneva4643136
Bibb434594
Barbour369980
Butler3439100
Marengo342393
Monroe337466
Randolph334867
Pickens333988
Fayette330085
Henry320766
Hale318489
Cherokee318363
Crenshaw260777
Washington256952
Cleburne254560
Lamar251953
Clay251169
Macon245064
Conecuh193162
Coosa185547
Lowndes178268
Wilcox177638
Bullock152545
Perry141840
Sumter139241
Greene130245
Choctaw93228
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