Shares of SoftBank Corp dropped over 10 percent on debut. This is because the investor appetite for biggest ever IPO by Japan was damaged by a latest service outage at the telecoms operator and concerns over its exposure to Huawei (the Chinese telecoms gear maker). The poor beginning for the unit of SoftBank Group Corp was uncommon in the IPO market of Japan. Out of 82 IPOs so far in 2018, SoftBank was only the 7th to open less than the IPO cost. Amongst latest primary IPOs, Japan Display was the only one to collapse, suffering a drop in its debut in 2014.
“Retail investors are dropping shares after viewing the opening less than the IPO cost, also impacted by an outage,” claimed market analyst to the media in an interview, refusing to be identified since he was not authorized to discuss it with media. “But I do not expect the shares will drop much more seeing their expectations and dividend yield for being added in stock indexes,” he claimed.
On a related note, SoftBank earlier claimed that it is in talks to take a majority share in WeWork Co. This would be a huge bet on the 8-year-old supplier of shared office space, as per sources well aware with the discussions.
The deal could total in the range of $15–20 Billion and might likely come from Vision Fund by SoftBank, some of the sources claimed. The $92 Billion Vision Fund, which is supported majorly by Abu Dhabi and Saudi Arabia wealth funds along with SoftBank, already controls almost 20% of WeWork after in 2017 promising $4.4 Billion in equity shares at a $20 Billion capitalization.
Discussions are fluid and there is no assurance there will be an agreement, some of the sources claimed further. WeWork and SoftBank this summer were talking about a smaller deal that might value WeWork at almost $40 Billion, the media claimed in June 2018.
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