SoftBank shares breach Y10,000, scale two-decade high, on record Vision Fund profit

11:12 pm Monday, February 08th, 2021

By Sam Nussey

TOKYO (Reuters) – Japan’s SoftBank Group Corp shares climbed above 10,000 yen apiece on Tuesday, hitting two-decade highs, a day after the group’s Vision Fund unit reported record profits as portfolio company listings accelerate.

SoftBank’s shares were up 3.3% at Y9,800 at 03:56 GMT having earlier shot past Y10,000, the biggest intraday jump in two months. On Monday SoftBank reported a bounce back in the value of its portfolio after startups like home-selling platform Opendoor went public.

With equity raising running at record levels, major assets from the first $100 billion Vision Fund portfolio expected to go public include ride-hailing firms Didi and Grab. [L1N2JT0HC]

The Japanese conglomerate is “effectively owner of the most lucrative portfolio amidst an ongoing retail IPO frenzy,” Jefferies analyst Atul Goyal wrote in a note, referring to initial public offerings.

Most of the value of the first fund is locked up in a small number of large assets, which also include e-commerce firm Coupang and TikTok-owner Bytedance, in contrast to smaller bets by Vision Fund 2.

Frothy markets have seen the value of many of SoftBank’s assets, or “golden eggs” as Chief Executive Officer Masayoshi Son termed them on Monday, climb with the value of its assets standing at $221 billion at the end of December.

That is $37 billion lower than three months earlier after the share price of Son’s largest “egg”, Alibaba, tumbled following the regulatory halt of the IPO of its fintech affiliate Ant in November.

“The explosion in market liquidity over the last 9-10 months has played a huge role and we believe SoftBank success correlates closely with how U.S. tech trades going forward,” Redex Research analyst Kirk Boodry wrote in a note.

Japan’s benchmark share index was trading at a 30-year high on Tuesday after Wall Street closed at an all-time high overnight.

SoftBank “looks overvalued at current levels but we would expect a turnaround only if the tech market cools off,” Morningstar analyst Dan Baker wrote in a note.

(Reporting by Sam Nussey; Editing by Kenneth Maxwell & Shri Navaratnam)