Shares in SoftBank unit rebound after earlier plunge

Tokyo: Shares in the mobile unit of Japanese technology giant SoftBank rebounded after steep early declines on a roller-coaster second trading day Thursday, after a bruising debut saw stocks close 14.5 per cent lower.
In early exchanges, shares in SoftBank Corp were down 7.6 per cent at 1,183 yen as heavy selling dominated at the opening bell. The IPO price was 1,500 yen.
The shares were 8.3 per cent down at their lowest point — 22 per cent below the IPO price.
But buyers were found at that level and shares erased all of their early losses, eventually closing in positive territory at 1,296 yen, up 1.09 per cent.
The stock in fact bucked the trend on a day of heavy selling on the wider Tokyo market, with the benchmark Nikkei 225 down more than three per cent and plunging to a 15-month low.
The volatile trading came after the firm raised some $23.5 billion in an initial public offering that was Japan’s biggest and the second-largest globally after Chinese e-commerce giant Alibaba’s debut in 2014.
The money raised will swell the coffers of CEO Masayoshi Son’s Vision Fund, which has invested in some of the hottest tech firms, including Uber and WeWork.
Analysts said the stock had underperformed for several reasons: a weaker market in general, concerns over increased official intervention in the Japanese mobile sector, and a humiliating technical glitch in the run-up to the IPO.
But “after the dips, some are buying partly because they are attracted to expected high dividend yields of the shares,” said Hiroaki Hiwata, strategist at Toyo Securities.
The benchmark Japanese market, the Nikkei 225, also opened down nearly one per cent and ended the Thursday session down 2.84 per cent as traders fretted over the pace of US Federal Reserve rate hikes next year.
Speaking to reporters after Wednesday’s stock plunge, Ken Miyauchi, CEO of the SoftBank Corp mobile division, acknowledged it was “unfortunate that the share price ended down”.
— AFP