SoftBank shares fall after Vision Fund reports another big loss

TOKYO, Nov 14 (Reuters) – Shares in Japan’s SoftBank Group Corp ( 9984.T ) plunged on Monday after the company reported a big loss at its Vision Fund investment arm for the third straight quarter.

Shares fell 1[ads1]3% in early afternoon trading – on track for their biggest one-day loss in more than two and a half years.

However, analysts said the share price drop was partly a setback from a steep rally that had been fueled by hopes of more share buybacks. By Friday’s close, SoftBank shares had risen more than 40% since October.

“Various expectations including another round of share buybacks had pushed their share prices higher and now they are in an adjustment phase,” SBI Securities analyst Shinji Moriyuki said.

Just a day before Friday’s quarterly results, SoftBank announced the completion of a plan to spend 400 billion yen ($2.88 billion) to buy back its own shares.

Jefferies analyst Atul Goyal said in a note to clients: “We were looking for another round of buyback announcement but there was none.”

Market specialists said worries about weakness in technology stocks are another factor weighing on shares of SoftBank, which bets heavily on the growth of high-tech companies.

“The outlook for IT (information technology) companies is weak amid the slowing global economy,” Shigetoshi Kamada, managing director of research at Tachibana Securities.

“Expectations for SoftBank Group’s growth have shrunk as there is concern that the value of its portfolio companies may not grow in this environment.”

The Vision Fund recorded investment losses of 1.38 trillion yen ($9.9 billion) in the three months to September 30, as the value of its portfolio continued to fall. read more

But SoftBank as a whole reported its first quarterly profit in three quarters, boosted by divesting some of its stake in China’s Alibaba Group Holdings ( 9988.HK ).

SoftBank shares were still up 11% since the start of the year, far outperforming the tech-heavy Nasdaq’s (.IXIC) 27.6% drop and the Nikkei average’s (.N225) 2.6% drop.

($1 = 138.9900 yen)

Reporting by Kiyoshi Takenaka, Junko Fujita; Editing by David Dolan and Edwina Gibbs

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