SoftBank slides 11%, biggest drop in months
What's the story
SoftBank Group Corp's shares have taken a major hit, falling over 11% on Thursday. The decline is in line with a wider sell-off of global technology stocks triggered by profit-booking after Wall Street's overnight weakness. The downturn has also affected other Asian tech giants such as Taiwan Semiconductor Manufacturing Co (TSMC) and Foxconn, Samsung Electronics and SK Hynix in South Korea.
Market reaction
SoftBank's stock hits a wall after strong rally
Despite a strong rally this year, driven by investor optimism around artificial intelligence (AI), SoftBank's stock has been hit hard. The shares had gained some 70% year-to-date and recently overtook Toyota Motor Corp to become Japan's most valuable listed company. However, investor sentiment seems to be turning cautious amid concerns over high valuations and SoftBank's aggressive investments in AI-related businesses.
Future outlook
CEO Son remains bullish on AI despite market correction
SoftBank's CEO Masayoshi Son recently reiterated his bullish view on AI, predicting its revolution will be bigger than the dot-com boom. He said market corrections should be seen as buying opportunities, much like long-term tech trends such as electrification and motorization that kept growing despite short-term downturns. Deutsche Bank analyst Peter Milliken noted investors are increasingly focused on near-term momentum, making it hard for many to see the long-term potential of AI-related businesses.
Recent transactions
SoftBank sells stake in Indian eyewear retailer Lenskart
In a separate development, SoftBank's affiliate SVF II Lightbulb (Cayman) sold a 3.25% stake in Indian eyewear retailer Lenskart on Wednesday. The deal saw the sale of 56.5 million shares at ₹508.55 per share, valuing the transaction at some ₹2,873 crore. Despite the recent downturn in its shares and global tech stocks, SoftBank remains active in strategic business moves such as this one.