(Bloomberg) — The shares of SoftBank Group Corp.’s Japanese telecom business fell at the start of trading after Masayoshi Son raised 2.65 trillion yen ($23.6 billion) in an initial public offering.
SoftBank Corp., the new entity trading under ticker 9434 on the Tokyo Stock Exchange, declined 9.3 percent to 1,360 yen at midday in Tokyo on Wednesday. Of the investors who bought the stock at the offering price of 1,500 yen, 90 percent were individuals and the rest were funds and money managers.
SoftBank and its underwriters — Nomura Holdings Inc., Deutsche Bank AG, JPMorgan Chase & Co., Sumitomo Mitsui Financial Group Inc., Mizuho Financial Group Inc. and Goldman Sachs Group Inc. — 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.
Including a greenshoe overallotment of about 160 million shares, SoftBank sold a total of roughly 1.76 billion shares.
“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 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.”
(Updates shares in second paragraph.)
To contact the reporters on this story: Pavel Alpeyev in Tokyo at [email protected];Takahiko Hyuga in Tokyo at [email protected]
To contact the editors responsible for this story: Robert Fenner at [email protected], Reed Stevenson
For more articles like this, please visit us at bloomberg.com
©2018 Bloomberg L.P.