SoftBank shares slide after Nvidia stake sale – Financial Times
Shares in SoftBank Group fell by as much as 10 per cent the morning after it revealed it had sold its entire stake in chipmaker Nvidia for $5.8bn in order to fund massive investments in artificial intelligence, including OpenAI.
The stock recovered to close down 3.5 per cent, and is still up close to 140 per cent so far this year.
However some analysts said retail investors would have sold after the announcement of the Nvidia exit, amid concerns that SoftBank’s chief Masayoshi Son was deepening his commitment to OpenAI, the maker of ChatGPT.
“The news that SoftBank has sold its stake in Nvidia has not been well received, as the reality is that SoftBank has exited a relatively safe AI investment and bet it all on a proposition where the outcome is very uncertain,” wrote Richard Windsor, tech analyst at Radio Free Mobile.
Another analyst in Tokyo said that while “some retail was panicking” at the share sale, the focus should remain on the $16.2bn of quarterly net profit reported by SoftBank on Tuesday.
Second-quarter profits were buoyed by the group’s tech-heavy Vision Funds, which recorded an investment gain of ¥2.8tn ($18bn) from holdings including OpenAI. SoftBank also sold some of its stake in US telecoms operator T-Mobile for $9.2bn.
However, Windsor cautioned that “a large proportion” of the profit “was driven by unrealised gains on investments, which history shows can evaporate in a heartbeat”.
SoftBank’s chief financial officer Yoshimitsu Goto said on Tuesday that the group had a “need to divest our existing portfolios” to fund more than $30bn of anticipated investment in OpenAI.
