SoftBank’s stock price plummeted amid potential delay to OpenAI’s IPO.
2 hours ago
Due to market concerns that OpenAI may delay its IPO until next year, which would delay returns for its Japanese investors, SoftBank Group’s stock fell 12% during intraday trading. As of October, SoftBank’s investment in ChatGPT developer OpenAI is projected to reach roughly $65 billion. Earlier, market expectations of massive gains from OpenAI’s IPO had pushed SoftBank’s stock to record highs, lifting its market capitalization above Toyota Motor Corp. last month. However, per a New York Times report, OpenAI’s advisory bankers warned that tech stock volatility could dampen market enthusiasm for the IPO. As a result, SoftBank’s stock posted its largest single-day drop in Tokyo in over three months during Friday’s morning trading session. Hiroki Takei, a strategist at Resona Holdings, noted that an OpenAI IPO would provide transparent market valuations for the vast assets SoftBank holds, as its portfolio includes hundreds of unlisted startups. If OpenAI goes public, investors will find it easier to assess SoftBank’s overall portfolio, and this transparency is expected to reduce the significant conglomerate discount or risk premium currently weighing on SoftBank’s shares. “News of a delayed IPO will naturally lower these expectations,” he said.
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