SoftBank Group Shares Plummet in Historic Drop, Wiping Billions from Son's Fortune

SoftBank Group Shares Plunge Most Since Going Public in 1998

A stock rout in Japan wiped out $15 billion of SoftBank Group Corp.'s value on Monday, after the company's biggest single-day fall since founder Masayoshi Son took the company public in 1998. The technology giant's stock fell 19%, extending its decline for the September quarter so far to 38%, in line to be the biggest such drop since 2001. The plunge comes as Son prepares an investment blitz in AI and semiconductor technologies. The global market rout also threatens to hurt SoftBank's Vision Fund unit, which holds investments in hundreds of technology startups.

SoftBank plunges 19%, its biggest drop since 1998 IPO; $2.6 bn wiped off Masayoshi Son's fortune

Shares were down 8% Friday in Tokyo. Over two days, the technology conglomerate is down roughly 14%. Even after the recent plunge, Son is up about $2.7 billion from the $11.3 billion he began the year with, according to the Bloomberg Billionaires Index.A two-day wipeout in shares of SoftBank Group Corp. has cut $2.6 billion off the fortune of its founder Masayoshi Son, as the tech investor is buffeted by the Bank of Japan's earlier-than-expected interest-rate hike. Shares were down 8% Friday in Tokyo. Over two days, the technology conglomerate is down roughly 14%. Even after the recent plunge, Son is up about $2.7 billion from the $11.3 billion he began the year with, according to the Bloomberg Billionaires Index. The billionaire has emerged as one of the hardest hit tycoons in the swift reversal of Japanese stocks. Tokyo-based SoftBank, among the world's biggest tech investors, had been up 46% through the end of July. It owns most of chipmaker Arm Holdings Plc, shares of which soared this year on expectations it can profit from enthusiasm for artificial intelligence. But Arm's shares plunged 16% Thursday when it disappointed investors by reaffirming an existing annual sales forecast. On Friday, Japanese shares dropped the most since 2016 as the fallout from tighter monetary policy roiled one of the world's best-performing markets. SoftBank's international operations also mean a strengthening yen poses some risk. Japan's currency climbed to a four-month high on Thursday following hawkish signals from the BOJ earlier in the week. Son, 66, is SoftBank's largest shareholder in the roughly $78 billion giant, but much of his stake is pledged as collateral against loans with various financial institutions.

SoftBank shares tank near 19%, wiping off $4.6 billion from founder Masayoshi Son's fortune

On Monday, Son's net worth fell by $4.6 billion alone, according to the Forbes real-time billionaires list. The Nikkei 225 meanwhile posted a 12.4% loss which marked the worst day for the index since the "Black Monday" of 1987. Before the declines of the past few days, SoftBank's stock had rallied this year and even hit a new record high, as the company's Vision Fund division continued its recovery. A big jump in the share price of Arm, the British chip designer which is roughly 90% owned by SoftBank, has also contributed to the Japanese company's stock appreciation this year. But Monday's price plunge leaves SoftBank's shares just 1.7% higher for the year. Around $28.3 billion has been wiped of SoftBank's value since the close of trade on Wednesday, according to CNBC calculations. SoftBank will report its fiscal first-quarter earnings this Wednesday, with investors hoping to see further recovery in the Vision Fund. Son, who has been out of the public spotlight for a while, made a reappearance in June to discuss his vision for the future of artificial intelligence, which he predicts will eventually be 10,000 times smarter than humans.

Global market crash: SoftBank Group shares fall most since going public in 1998

Read more: Bitcoin plunges, Ether sees worst drop since 2021 amid US recession fears The technology giant's stock fell 19%, extending its decline for the September quarter so far to 38%, in line to be the biggest such drop since 2001. The plunge comes as Son prepares an investment blitz in AI and semiconductor technologies. The global market rout also threatens to hurt SoftBank's Vision Fund unit, which holds investments in hundreds of technology startups. "AI's hype is fading now that there's a greater focus on AI companies' ability to deliver revenue and earnings," Bloomberg Intelligence analysts Marvin Lo and Chris Muckensturm wrote in a note. "SoftBank's AI investment strategy might help the company return to profitability, but it might not be smooth sailing with execution risk high." The Topix and Nikkei 225 Stock Average tumbled 12% Monday on a surge in the yen, tighter monetary policy and the deteriorating economic outlook in the US. SoftBank is scheduled to release its quarterly results Wednesday, when it's expected to report a slim profit. "The selloff is overdone," said Kirk Boodry, an analyst at Astris Advisory. "The last time SoftBank Group traded like this was the capitulation trade when Covid fears swamped markets and the discount to net asset value was almost 70% at one point." The discount has expanded to 57% today as markets account for higher volatility and risk for SoftBank investments, according to Boodry. The day's stock declines are not wholly tech-related and reflect rising concerns over a stronger yen and geopolitical risks surrounding the Middle East, he added.