The shares of SoftBank Group Corp.’s Japanese telecom business fell at the start of trading after Masayoshi Son raised more than $20 billion in an initial public offering.
SoftBank Corp., the new entity trading under ticker 9434 on the Tokyo Stock Exchange, declined 9.1 percent to 1,363 yen as of 9:26 a.m. in Tokyo on Wednesday, compared with 1,500 yen, the price at which the stock was sold to investors in the offering.
Including a greenshoe overallotment of about 160 million shares, SoftBank is selling a total of roughly 1.76 billion shares. The 2.65 trillion yen ($23.6 billion) listing includes the cash-generating businesses spanning wireless, broadband and fixed-line services.
“Once the levee broke at 1,500 yen there was nothing that was going to hold it up there,” said Andrew Jackson, head of Japanese equities at Soochow CSSD Capital Markets. “Looks like the majority of the greenshoe has been spent already.”
SoftBank stuck to its price for the offering instead of a range, even amid a Japan-wide network outage and a continuing global equities selloff. Son is selling a stake in his crown-jewel domestic telecoms business to fund further investments in global technology companies, a portfolio that already includes Uber Technologies Inc. and WeWork Cos. The listing also comes at a time when Japan’s wireless industry has come under pressure from the government to reduce phone bills. The entry of e-commerce giant Rakuten Inc. is also raising the risks of a price war next year.
SoftBank is looking to tempt investors with a dividend payout ratio of about 85 percent of net income. Based on net income in the latest fiscal year and the 1,500 price at offering, that would work out to a yield of almost 5 percent.
“It’s disappointing,” said Hideyuki Sakai, who runs a technology company in Tokyo and bought 1,000 shares in the IPO. “I am holding the shares for a while, anticipating the high dividend payment.”
Nomura Holdings Inc., Deutsche Bank AG, JPMorgan Chase & Co., Sumitomo Mitsui Financial Group Inc., Mizuho Financial Group Inc. and Goldman Sachs Group Inc. are the joint global coordinators.
Bloomberg