SoftBank hits new 20-year high as Uber gains, DoorDash plans IPO

SoftBank Group Corp. rose to a fresh 20-year high as the recent stock market surge boosted the value of holdings like Uber Technologies Inc. and brightened the prospects for portfolio companies going public.

By:BLOOMBERG
| Updated on: Aug 21 2022, 00:10 IST
FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato
FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato (REUTERS)

The U.S. ride-hailing pioneer recovered from stumbles after its initial public offering last year and its shares have gained more than 70% this year. Softbank's 13% stake is worth about $11 billion. The Japanese company is also a major shareholder in U.S. delivery giant DoorDash Inc., which filed to go public this month. SoftBank's stock gained 2.3% to 7,250 yen on Friday, the highest level since March of 2000 in the midst of the dot-com boom.

Citigroup Inc. earlier this week raised its target price on SoftBank to 11,000 yen from 10,200 yen, citing improved earnings prospects at the Tokyo-based company's investments business. Nomura Holdings Inc. raised its target to 9,100 yen from 8,190 yen citing the same reason. Both brokerages have a buy rating on SoftBank.

You may be interested in

MobilesTablets Laptops
7% OFF
Apple iPhone 15 Pro Max
  • Black Titanium
  • 8 GB RAM
  • 256 GB Storage
28% OFF
Samsung Galaxy S23 Ultra 5G
  • Green
  • 12 GB RAM
  • 256 GB Storage
Google Pixel 8 Pro
  • Obsidian
  • 12 GB RAM
  • 128 GB Storage
Apple iPhone 15 Plus
  • Black
  • 6 GB RAM
  • 128 GB Storage

A series of missteps in the investment business including a failed WeWork IPO and the impact of the Covid-19 outbreak led to record losses last fiscal year. SoftBank founder Masayoshi Son responded by unveiling plans to sell 4.5 trillion yen ($43 billion) in assets and buy back a record 2.5 trillion yen of his own stock. Shares are up more than 160% from their March low.

Also read
Looking for a smartphone? To check mobile finder click here.

ALSO READ: SoftBank in talks to sell robot maker Boston Dynamics to Hyundai

“We see plenty of room for the shares to rise against a backdrop of aggressive share buybacks and efforts to improve financial health,” Citigroup analyst Mitsunobu Tsuruo wrote in the report.

The Japanese conglomerate reported a record 784.4 billion yen profit in its Vision Fund business for the three months ended Sept. 30, a sign the fund's investments in startups are paying off amid a broad rally in technology stocks. The bull market is also making it easier for SoftBank-backed startups to go public.

Opendoor, which buys and sells homes, is going public through a merger with a blank-check company led by Chamath Palihapitiya. Compass, another SoftBank portfolio company, has selected underwriters for a potential initial public offering, a person with knowledge of the matter has said.

By Pavel Alpeyev and Takahiko Hyuga

Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. For our latest videos, subscribe to our YouTube channel.

First Published Date: 27 Nov, 15:49 IST
Tags:
NEXT ARTICLE BEGINS