SoftBank rekindles talks of taking the group private as fiscal pain soars

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SoftBank rekindles talks of taking the group private as fiscal pain soars

Amid conflicting narratives over the fiscal fallouts of the pandemic outbreak which has been rattling business activities across the globe, the Japanese investment conglomerate SoftBank Group Corp. had been exploring an option to take the Tokyo-based tech group private, as the company has been struggling to shrug off the losses of its assets despite a new strategy to divest some of its large assets, a Financial Times report published late on Sunday had unveiled citing sources familiar with the subject-matter.

In point of fact, latest discussions of taking the group private, which in effect would likely to jeopardize its entire growth strategy including an introduction of a second Vision Fund, came against a baleful backdrop of a persistence freefall in SoftBank’s equity valuation in contrast to the values of the individual holdings, while an asset sale program adopted earlier this year had failed to narrow down the gaps, eventually stoking fears of a mass-scale mishap at the company’s growth strategy.

SoftBank shares continue to plunge

Aside from that, latest talks over a Softbank move to take the company private came forth as the Tokyo-listed shares of the tech investment titan fell roughly 10 per cent this year and had closed Friday’s market at 1,307.50 yen, more than eleven per cent lower than its IPO price of 1,500 per share.

Nevertheless, since SoftBank’s listing in the Nikkei 225 index roughly two years ago, the investment conglomerate appeared to have become a Nasdaq whale which had been inflating market caps of tech stocks irrespective of their performances, while the ride-hailing pioneer Uber Technologies alongside its smaller rival Lyft Inc.

could have been two of the blazing examples of SoftBank CEO Masayoshi Son’s erratic investments as both of the ride-sharing giants had yet to state a profit. Apart from that, the Japanese investment conglomerate had digested its first quarterly loss in a decade and a half later last year, mostly due to the drawbacks of a takeover of the loss-making office space sharing start-up WeWork.

Besides, followed by a cataclysmic vandalism in WeWork acquisition, SoftBank had been met with wide-ranging challenges such as a persistence loss at its $100 billion Vision fund, slandering questions regarding its option purchases over the recent run-up in the US stocks alongside pressures from activist investors such as Elliot Management, while an end of Abenomics era had also been playing a pivotal role in SoftBank’s latest decision to go private in order to be a long-term investor instead of a monolithic global tech management company.