The stock turmoil erased US$2.9 billion of Son’s own personal wealth in a single day, according to the Bloomberg Billionaires Index. Son’s seen more than US$5 billion of his worth vanish over the last three trading days, erasing much of his wealth gains since the start of the year and making him one of the hardest-hit tycoons in Asia.
“AI’s hype is fading now that there’s a greater focus on AI companies’ ability to deliver revenue and earnings,” Bloomberg Intelligence analysts Marvin Lo and Chris Muckensturm wrote in a note. “SoftBank’s AI investment strategy might help the company return to profitability, but it might not be smooth sailing with execution risk high.”
The Topix and Nikkei 225 Stock Average tumbled 12% Monday on a surge in the yen, tighter monetary policy and the deteriorating economic outlook in the US. SoftBank is scheduled to release its quarterly results Wednesday, when it’s expected to report a slim profit.
“The selloff is overdone,” said Kirk Boodry, an analyst at Astris Advisory. “The last time SoftBank Group traded like this was the capitulation trade when Covid-19 fears swamped markets and the discount to net asset value was almost 70% at one point.”
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The discount has expanded to 57% today as markets account for higher volatility and risk for SoftBank investments, according to Boodry. The day’s stock declines are not wholly tech-related and reflect rising concerns over a stronger yen and geopolitical risks surrounding the Middle East, he added.
