INTERNATIONAL – Shares in Japanese conglomerate SoftBank Group tumbled 5.5 percent on Friday, a day after one of its biggest tech bets, Uber Technologies, priced its initial public offering (IPO) at the low end of the targeted range.
A successful market debut of Uber will be seen as a test of SoftBank’s investment strategy, as other big tech firms in its almost $100 billion (R1.4 trillion) Vision Fund also head toward public listings.
Uber’s listing is the most anticipated IPO since Facebook’s market debut seven years ago, and the world’s largest ride-hailing firm hopes its conservative pricing approach will spare it the trading plunge suffered by rival Lyft.
“(SoftBank) shares have gone up ahead of Uber’s IPO, but some investors may have sold shares once the price was decided,” said Tsutomu Yamada, a market analyst at Kabu.com Securities.
The value of Vision Fund’s stake in Uber grew ¥418bn (R54bn) last year.
Shares in SoftBank tumbled as much as 5.5 percent on Friday, its biggest percentage drop in five months, wiping $6bn off its market capitalisation. The group is now valued at around $104bn.
SoftBank’s transition away from telecoms toward tech investments accelerated with the ¥2.35trln listing of a third of its domestic telco SoftBank in December in what was Japan’s largest IPO.
That provided the funds for a share buyback that has helped drive up the parent group’s stock by nearly 50 percent this year.
Pledging to enhance shareholder returns, SoftBank Group announced a stock split on Thursday, while leaving the per-share dividend unchanged for the current financial year, effectively doubling its shareholder payout.