On Wednesday, in a statement SoftBank Group Corp said, its shares were down 5% in afternoon trade on Wednesday extending this week’s downward trot, with the bear trend wiping off $15 billion from its market capitalization, with investors worried about SoftBank’s exposure to the U.S. tech stocks.
The decline in as much as 12% of SoftBank’s shares last week saw the Japanese company make big bets on equity derivatives tied to tech firms.
Last month, Masayoshi Son, SoftBank’s CEO said, the conglomerate aims to place cash from an asset sale programme in public stocks; the complexity of the transactions however has caused jitters among retail investors in a company widely viewed as being opaque, said analysts.
The group “needs to protect Masa’s reputation by making sure it is not seen as a short-term trading giant, which would warrant a much bigger discount,” wrote Jefferies analyst Atul Goyal in a note, in reference to the gap between the value of its assets and its market valuation.
SoftBank’s purchase of call options in addition to share buying, which gives access to a much higher amount of shares on paper, is seen by analysts as having exacerbated the market’s run-up and subsequent sell-off.
SoftBank declined to comment on its trades.