SoftBank Group shares have plummeted the most since going public in 1998

(Bloomberg) — A stock crisis in Japan wiped $15 billion from the value of SoftBank Group Corp. on Monday, following the company’s biggest single-day drop since founder Masayoshi Son took the company public in 1998.

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The tech giant’s shares fell 19%, extending the decline so far to 38% in the September quarter, which is expected to be the biggest drop since 2001. The drop comes as Son prepares an investment campaign in AI and technologies of semiconductors. The global market rout also threatens to harm SoftBank’s Vision Fund unit, which holds investments in hundreds of technology startups.

The stock turmoil erased $2.9 billion from Son’s personal wealth in a single day, according to the Bloomberg Billionaires Index. Son has seen more than $5 billion of his value disappear in the last three trading sessions, erasing much of his wealth gains since the start of the year and making him one of the hardest-hit tycoons in Asia.

“The AI ​​hype is fading now that there is an increased focus on AI companies’ ability to generate revenue and profits,” Bloomberg Intelligence analysts Marvin Lo and Chris Muckensturm wrote in a note. “SoftBank’s AI investment strategy could help the company return to profitability, but it may not be a smooth process with high execution risk.”

The Topix and Nikkei 225 stock average fell 12% on Monday due to the rising yen, tighter monetary policy and the deteriorating economic outlook in the US. SoftBank is scheduled to release its quarterly results on Wednesday, when it is expected to report a small profit.

“The sell-off is overdone,” said Kirk Boodry, an analyst at Astris Advisory. “The last time SoftBank Group traded like this was in the capitulation negotiation, when Covid fears flooded the markets and the discount to net asset value was almost 70% at one point.”

The discount widened to 57% today as markets account for greater volatility and risk for SoftBank’s investments, according to Boodry. The day’s stock declines are not entirely technology-related and reflect growing concerns about a stronger yen and geopolitical risks surrounding the Middle East, he added.

–With assistance from Patrick Winters and Tom Maloney.

(Updates with sharing slide’s impact on child’s personal wealth.)

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