SoftBank’s shares tumble after series of bad news about portfolio companies hit global markets

• SoftBank shares fell as low as 5,057 yen, the lowest since March 2020

• Portfolio companies including Alibaba, Arm, Didi Chuxing, and Grab are all experiencing periods of uncertainty hitting the market value

Japanese conglomerate SoftBank Group Corp shares slumped by more than 8% in Tokyo on Monday, extending its last week’s drop as the value of its key portfolio companies continued to slide after a series of bad news.

Softbank’s share closed at 5559 yen ($49.10) last week and opened at 5201 yen on Monday and slid 8.20% on Monday to and closed to 5103 yen after a heavy sell-off. At one point, shares fell as low as 5,057 yen, the lowest since March 2020.

ALSO READ: SoftBank shares fell over 3% after Grab, Didi, Arm triple whammy

The fall in share price, which extends its seventh consecutive day of losses, comes amid a period of uncertainty around some of its significant investments in tech companies and a broader regional sell-off of tech stocks in Asia.

Alibaba reshuffling

SoftBank’s most valuable company, Alibaba Group’s market cap fell by several billion dollars on Monday, after the Chinese e-commerce giant announced its longtime finance chief Maggie Wu is stepping down as the company plans a management restructuring to reverse slowing growth and halt the fall of its share price to a five-year low.

Alibaba’s share price slumped shares plummeted over 8% when the Hong Kong exchange opened after the giant revealed plans to form two new units— international digital commerce and China digital commerce — in a bid to become more agile and accelerate growth.

ALSO READ: Alibaba forecasts lowest revenue growth since 2014

The giant, which was founded by Jack Ma more than two decades ago, is currently facing headwinds on multiple fronts, including increased competition, a slowing economy, and a regulatory crackdown since Ma criticized Chinese regulators last year, leading to the suspension of sister company Ant Group’s blockbuster IPO.

DiDi and Grab debacle

Another setback came after the Softbank-backed Chinese ride-hailing giant DiDi Chuxing last week said it plans to delist from the NYSE less than six months after its market debut in the U.S. and relist on the Hong Kong Stock Exchange.

Days after the IPO, Beijing started a cybersecurity probe and forced its services off domestic app stores.

Shares of DiDi have plunged 57% since its IPO on June 30 and closed at $7.80 on Friday.

ALSO READ: DiDi declares the end of its ride on Wall Street

ALSO READ: Southeast Asia’s Grab falls more than 20% in U.S. debut

On Thursday, the Japanese conglomerate-backed Southeast Asia’s ride-hailing giant Grab fell more than 20% on its Nasdaq debut after it went public following a $40 billion SPAC merger.

Arm-Nvidia deal

In another blow for SoftBank, the sale of its British semiconductor designer Arm to graphics card maker Nvidia Corp is looking increasingly questionable.

EU antitrust regulators have temporarily halted their investigation into the largest-ever chip deal as they await more information, according to a European Commission filing.

ALSO READ: Nvidia’s $40 billion Arm takeover bid faces in-depth EU probe

Last week, the deal hit its most significant hurdle when the U.S. Federal Trade Commission (FTC) sued to block the acquisition deal.

SoftBank initially agreed to sell Arm for $40 billion, but the deal price has soared to around $74 billion following a surge in Nvidia’s share price, according to Bloomberg.

SoftBank Vision Fund

Last month, the Japanese giant reported a quarterly loss as its Vision Fund unit took a $10 billion hit from a decline in the share price of its portfolio companies.

Even as the value of its assets fell, SoftBank said its stock is undervalued and committed to spending up to 1 trillion yen buying back nearly 15% of its shares.

While CEO Masayoshi Son has likened SoftBank to a goose laying “golden eggs,” the most recent results underscore the headwinds for the investment business.

“We are in the middle of a blizzard,” Son told a news conference at the time, adding he was “not proud” of the Vision Fund’s performance in the quarter. Yet, he said the company was making steady steps to double the “golden eggs” numbers compared to last year.

Picture Credit: Fortune