The mobile phone unit of Japanese tech giant Softbank has had a disappointing debut on the Tokyo stock market, with shares falling 14.5%. The firm raised as much as 2.6 trillion yen ($23bn; £18bn) by selling shares at 1,500 yen each in one of the world’s largest ever stock offerings. But by the close of trade in Tokyo, shares were down 14.5% from the price set for its initial public offering.
Analysts said the disappointing debut was not entirely unexpected. “Softbank wasn’t as popular an [initial public offering] as the market had expected,” Singapore-based market expert David Kuo told the BBC.
“It was oversubscribed, but not as much as hoped.” Originally a telecoms firm, Softbank has become a vast conglomerate covering robotics, chips and investments. The firm was founded by Japan’s richest man, Masayoshi Son.
While you could already buy shares in Softbank itself, its telecommunications unit, called Softbank Corp, is now also available for public purchase. The firm’s initial public offering (IPO) – a way for a company to raise new capital – was seen as cementing Softbank’s move from a domestic telecommunication provider to a global tech investor. It was expected to be one of the biggest offerings of shares on any stock market to date.
Chinese e-commerce giant Alibaba listed for a record $25bn in 2014. In comparison, Facebook raised $16bn when it went public in 2012. Mr Kuo, who is chief executive of the Motley Fool in Singapore, said however that the stock price should pick up once investors understood better how to value Softbank’s telecoms arm.
“As an entrepreneur, Masayoshi Son had the freedom to invest as he wished,” Mr Kuo said. “But the [newly listed arm] now has to play by the harsh rules of the market. It will be valued on revenues, profit and cash flow.”
Softbank started as a telecoms company, but has spread out through many deals and investments. The firm has moved into robotics, bought UK chip firm ARM Holdings and invested in satellite start-up OneWeb and ride-sharing firms, as well as in self-driving technology with Toyota.
