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Home / Business / SoftBank's market value forms $ 9 billion as Uber IPO flops

SoftBank's market value forms $ 9 billion as Uber IPO flops



(Bloomberg) – On Thursday, when his company booked a $ 3.8 billion gain from his stake in Uber Technologies Inc., Masayoshi Son told SoftBank Group Corp. that their time had finally come. Instead, they are still waiting.

The day after Søn's earnings presentation, SoftBank stopped 5.4% and fell again on Monday, and dropped as much as 4.9%. Uber's original public offering was a flop of stocks that slipped on the first trading day, while USA and China cracked tensions over their trade battle. SoftBank has lost about $ 9 billion in market value despite reporting last week that its profits have more than tripled, thanks to the valuation gains from its stake in the American knight giant.

The son has featured SoftBank Group from primarily a telecommunications operator to a technology investment firm, and his $ 100 billion Vision Fund has begun to show promise as a major contributor to revenue. SoftBank's stock had rallied nearly 60% this year before its revenues. But the slide over the last two days shows that SoftBank is now also vulnerable to the bad news from Son's investment portfolio, as well as the good.

Uber opened at $ 42 or 6.7% below the $ 45 IPO award. Shortly afterwards, it went to $ 41.06. While the company shortly repaid almost all its losses within the early afternoon, the withdrawal showed short-lived.

"Uber debut does not live up to expectations, and that is why some investors sell," said Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co. "It is too early to tell how sensitive SoftBank will be to Uber's price movements in the future. But even if they fall somewhat, it does not have a direct impact on Vision Fund's profits."

The Vision Fund and SoftBank's own Sub-Fund contributed 1.26 trillion ($ 11.5 billion) for the fiscal year ending March 31, or slightly more than half of the total. Investments in 29 companies showed an increase in fair value, while 12 reported a decline.

In addition to Uber, SoftBank reserved a valuation gain of $ 203.4 billion from its stake in Guardant Health Inc., announced in October, and a $ 154.2 billion gain on India's Oyo. It also recorded a 222.6 billion yen loss due to the Nvidia Corp.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Peter Elstrom

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