SoftBank jumps 10%, shaking off record loss

Tokyo: Shares in SoftBank Group Corp gained 10% in morning trading in Tokyo on Friday as the market shook off a record loss, which had been widely flagged, at its Vision Fund unit.

"Alibaba remains the anchor asset. As long as that company doesn't deteriorate, a trading range for SoftBank between 4,500 and 5,500 yen is probably where it will be," said Redex Research analyst Kirk Boodry.

The bounce followed a late-day rally in U.S. stocks overnight, with the S&P 500 and Nasdaq Composite closing roughly flat. Tech stocks including flea market app operator Mercari and e-commerce-to-payments company Rakuten also rose in Tokyo.


The rebound came as SoftBank founder and chief executive officer (CEO) Masayoshi Son on Thursday pledged to scale back investing activity and preserve cash as the market downturn hammered his tech portfolio.

"When it rains, you open an umbrella," the billionaire told a news conference, pointing to SoftBank's $23 billion cash position and 20.4% loan-to-value ratio, which compares net debt with the equity value of holdings.

Son's retrenchment, which follows a drop off in IPO activity that had allowed SoftBank to recycle funds into new investments, came even as he outlined his belief that valuations would continue to climb in the longer term.

"Several investors observed that (Softbank) making aggressive investments in up-markets and then becoming defensive during down-markets makes it essentially a momentum-investor," Jefferies analyst Atul Goyal wrote in a client note.