SoftBank Group Corp’s plan earlier this month for its initial public offering was to be 1500 yen or $13.22 per share or $21.15 billion which would have made it the largest IPO ever.
SoftBank listed about one-third of the shares held by its parent company at 160 million shares.
However, on Wednesday when SoftBank’s Japanese mobile subsidiary started trading on the Tokyo Stock exchange its initial price brought in 1,463 yen ($13.03) for its shares, but began to slide to 1,392 yen ($12) by midmorning which was down 7% from 1500 yen ($13.22).
Executives of the Japanese multinational holding conglomerate headquartered in Tokyo, Japan were beside themselves using five different wooden hammers ringing the celebratory bells as the SoftBank’s IPO reached $18+ billion.
It’s possible that the slide would not have happened and SoftBank’s IPO may have remained at $21.15 billion if not for the massive service outage that affected a large number of its customers just a few weeks prior. Customers were unable to send text messages or make payments. An unfortunate occurrence to happen just before SoftBank’s Mobile division made its IPO this week.
Nevertheless, SoftBank Group Corp.’s mobile subsidiary did more than well and stands out along with past IPOs such as China’s Alibaba Group BABA, -2.19% which raised about $20 billion when it went public in 2014, a company, which by the way, SoftBank has an 29.5% investment interest, according to Wikipedia; as well as Facebook FB, +2.48%, which raised $16 billion in 2012.
Perhaps another reason for the slide from $21.15 billion IPO to $18+ billion is that investors are concerned over the relationship between SoftBank Group’s chief, Masayoshi Son and Saudi Arabian Crown Prince Mohammed bin Salman particularly after the killing of Saudi journalist Jamal Khashoggi which made world-wide news.
There’s also concern that the Saudi Arabian kingdom has made a hefty investment into SoftBank’s Vision Fund company to the tune of $100 billion. Vision Fund is into artificial intelligence and solar projects.
So to alay their investors concerns, SoftBank is pouring cash into other global companies that aren’t linked to Saudi Arabia. Companies such as: US owned Sprint (ca. 85%) and Brightstar (87%), Uber as well as British owned ARM and of course China’s Alibaba Group and many others.