SoftBank drops 17% to mark its largest daily decline in the stock market

Investors have been skeptic of SoftBank’s tech bets including the one on the ride-hailing service, Uber, and the office-sharing company, WeWork. In an adverse turn of events combined with the rising pressure from the Coronavirus pandemic, SoftBank Group marked its largest daily decline on Thursday and was reported trading 17% down.

SoftBank Group opened at £25.36 in the stock market on Thursday but closed at a significantly lower £21.0 per share. SoftBank has lost over 40% in 2020 so far. Its performance in 2019, on the other hand, was reported considerably upbeat with an annual gain of around 30%. The stock opened at around £28.26 per share in January 2019 but closed the year significantly higher at around £37.0 per share in December.

SoftBank Came Out As The 2^nd Largest Decline In Nikkei 225 Index

As Coronavirus continues to wreak havoc on global stocks, SoftBank came out as the second-largest decline in Japan’s benchmark Nikkei 225 index.

SoftBank’s largest decline before Thursday was when the dot-com bubble burst and wiped the majority of CEO Masayoshi Son’s wealth. The incident had effectively put an end to his enthusiastic plans of using the Vision Fund worth over £86 billion to establish an empire that focused on tech investing.

With the flu-like virus forcing people to stay at home and avoid unnecessary traveling, Uber is also taking a massive hit evident in its Wednesday’s close in the stock market that posted a 22% daily decline.

According to the sources, SoftBank is currently weighing the pros and cons of pulling out of a tender offer worth £2.61 billion for WeWork . While the office-sharing company boasts long property leases, the deteriorating economy is pushing its customers into quitting short contracts.

SoftBank Is Seeking To Raise £8.7 Billion For Its Vision Fund

According to analyst Kirk Boodry:

“WeWork is very likely finished as a viable business. Softbank faces a third straight quarter of losses for Vision Fund.”

The ongoing health emergency has weighed heavily on a number of companies on SoftBank’s portfolio. In order to offer financial support to such companies to combat the pandemic, SoftBank Group is currently seeking to raise around £8.7 billion for its Vision Fund. As per the sources, the Japanese multinational conglomerate holding company plans on contributing £4.35 billion by itself while the rest of the required funding will be sought from external investors.

The sources also confirm that SoftBank is currently faced with massive challenges in invoking interest in external investors to contribute to the Vision Fund.