Tech giant SoftBank’s shares get hit as Alibaba and Didi see stock slide

SoftBank Group shares fell by more than 8% Monday as the value of its portfolio companies continued to slide.

The Japanese tech giant’s share price fell from 5201 yen ($46) to 5103 yen on the Tokyo stock market. At one point, shares fell as low as 5,062 yen, their lowest level since June 2020. 

The fall in SoftBank’s share price, which marks its seventh consecutive day of losses, comes amid a period of uncertainty around some of the company’s biggest bets and a broader regional sell-off of tech stocks in Asia.

Chinese e-commerce firm Alibaba — SoftBank’s most valuable company — saw its market cap fall by several billion dollars Monday after the company announced a restructure.

Alibaba’s Hong Kong-traded shares plummeted over 8% after it revealed plans to form two new units to house its main e-commerce businesses — international digital commerce and China digital commerce — in a bid to become more agile and accelerate growth. It also said deputy chief financial officer Toby Xu will become the new chief financial officer from April.

The changes come as Alibaba faces headwinds on multiple fronts, including increased competition, a slowing economy and a regulatory crackdown.

Meanwhile, SoftBank-backed ride-hailing firm Didi Chuxing announced last week that it plans to de-list from the New York Stock Exchange less than six months after its IPO. The Chinese firm said it plans to relist on the Hong Kong Stock Exchange.

Shares of Didi have plunged 57% since its IPO on June 30, and closed at $7.80 on Friday.

In another blow for SoftBank, the sale of its Cambridge, U.K. based-chip designer Arm to Nvidia is looking increasing unlikely. Global regulatory scrutiny surrounding the deal has ramped up, with experts saying the deal is now “highly unlikely” to go through.

SoftBank initially agreed to sell the company for $40 billion, but the price of the deal has soared to around $74 billion following a surge in Nvidia’s share price, according to Bloomberg. As such, the company looks to miss out on a significant payday if the deal falls through.

Last month, SoftBank reported a quarterly loss as its Vision Fund unit took a $10 billion hit from a decline in the share price of its portfolio companies.

Even as the value of its assets fell, SoftBank said its stock is undervalued and pledged to spend up to 1 trillion yen buying back nearly 15% of its shares.

While CEO Masayoshi Son has likened SoftBank to a goose laying “golden eggs,” the most recent results underscore the headwinds for the investment business.

“We are in the middle of a blizzard,” Son told a news conference at the time, adding he was “not proud” of the Vision Fund’s performance in the quarter. Yet he said the company was making steady steps to double the numbers of “golden eggs” compared to last year.