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Japan’s SoftBank Group sees value of portfolio companies drop

By Mensholong Lepcha

08:57, 6 December 2021

SoftBank entrance in California, US
SoftBank entrance in California, US – Photo: Shutterstock

Japanese investment firm SoftBank Group fell over 8% on Monday due to recent troubles among its portfolio companies, most notably Didi Global, Alibaba Group and Arm.

On Monday, shares in SoftBank Group closed at JPY5103, its lowest close since 16 June 2020.

SoftBank’s investment in Chinese ride-hailing platform DiDi Global has seen its value plunge since the company listed on the New York Stock Exchange in July.

DiDi delisting

Intense pressure from state authorities and scrutiny on data security grounds forced DiDi Global to announces its delisting from the US market last week. Shares in DiDi Global dropped over 22% to $6.07 in New York on Friday. The company had listed at an initial public offering price of $14 per share.

According to the Financial Times, SoftBank Group’s Vision Fund paid $11.8bn for 20.1% stake in DiDi in 2019.

Furthermore, shares in Alibaba Group, SoftBank Group’s biggest exposure, is yet to recover from a landmark $2.8bn antitrust fine slapped on the company in April.

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SoftBank’s biggest investment

Regulatory crackdown on the Chinese tech sector has sent Hong Kong-listed Alibaba Group stock down by over 50% in 2021, as of Monday.

According to SoftBank Group’s results for quarter ended 30 September, investments in Alibaba Group contributed 28% to its total net asset value.

Oil - Crude

72.97 Price
-0.780% 1D Chg, %
Long position overnight fee -0.0224%
Short position overnight fee 0.0005%
Overnight fee time 22:00 (UTC)
Spread 0.040


0.63 Price
+0.090% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168


2,017.48 Price
-0.500% 1D Chg, %
Long position overnight fee -0.0200%
Short position overnight fee 0.0118%
Overnight fee time 22:00 (UTC)
Spread 0.30


43,453.30 Price
+3.440% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

SoftBank’s net asset value dropped over 30% quarter-on-quarter to $187bn during the September quarter.

Arm-Nvidia deal scrutinised

On 2 December, the US Federal Trade Commission sued to block US chipmaker Nvidia’s $40bn acquisition of SoftBank-owned, UK-based chip design provider Arm.

SoftBank Group acquired Arm for an acquisition price of about $31bn in July 2016.

“The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies,” said FTC Bureau of Competition Director Holly Vedova.

Seven-day losing streak

“The FTC’s lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations,” Vedova added.

On Monday, SoftBank Group stock closed lower for the seventh straight session. The stock has gained in only one out of the past 12 sessions, as of Monday.

SoftBank Group has invested co-working space service firm WeWork, TikTok owner ByteDance, South Korean e-commerce Coupang, India’s FlipKart, Indonesia’s GoTo, ride-haling firms Uber and Ola, and recently listed Singapore-based superapp Grab, among others.

Read more: Chip maker Nvidia’s (NVDA) deal to buy Arm faces FTC lawsuit

Markets in this article

Alibaba Group
70.5 USD
-0.5 -0.710%
SoftBank Group Corp.
5770.1 USD
-71.8 -1.240%
SoftBank Group Corp.
5770.1 USD
-71.8 -1.240%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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