SoftBank stock falls 12% on OpenAI IPO delay concerns
SoftBank Group shares fell 12.5% in Tokyo on Friday after reports that OpenAI is considering delaying its initial public offering until 2027, potentially postponing a major liquidity event for one of its largest investors.
The stock dropped as much as 13% during the session before closing 12.53% lower. SoftBank was among the largest drags on Japan’s Nikkei 225, which ended the day down about 4%.
OpenAI’s financial advisers reportedly presented executives with two options. The company could pursue an offering this year at a lower valuation or wait until 2027 and continue seeking a valuation of as much as $1 trillion.
CEO Sam Altman reportedly opposed reducing the target valuation to accelerate the listing.
OpenAI submitted a confidential draft registration statement to the Securities and Exchange Commission earlier this month. However, the company said at the time that it had not decided when to proceed and that it could remain private for longer.
OpenAI has not formally announced a revised IPO timetable.
SoftBank’s exposure to OpenAI
SoftBank agreed in February to invest an additional $30 billion in OpenAI. Once completed, the investment would bring its cumulative commitment to $64.6 billion and give the Japanese group an ownership interest of approximately 13%.
That exposure has made SoftBank shares increasingly sensitive to changes in OpenAI’s valuation and potential listing schedule.
SoftBank climbed to a record high in May as investors anticipated large valuation gains from a possible OpenAI IPO. A delayed listing would not change SoftBank’s ownership stake, but it could postpone the establishment of a public market valuation and limit the company’s ability to monetize part of its position.
The selloff came two days after SoftBank founder Masayoshi Son defended the company’s aggressive AI strategy and rejected concerns that the surge in artificial intelligence investment represents a bubble.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
As chip stocks plummet, "cybersecurity software" surges across the board, CrowdStrike and Palo Alto Networks hit new highs
CrowdStrike surged 13.8% in a single day to a record high, while Palo Alto Networks soared 13%. The software ETF outperformed the semiconductor ETF by more than 10 percentage points in a single day, marking the largest gap in history. Analysts believe that regardless of the pace of AI development, security demand will only continue to rise. Capital is accelerating its rotation from computing hardware to security software, with segments such as identity management and data governance expected to benefit first.
Altman can afford to wait, but Masayoshi Son can't: OpenAI will not go public this year, exposing a $20 billion gap and a credit weakness for SoftBank.
OpenAI has postponed its public listing, putting its largest external shareholder, SoftBank, in a liquidity crisis. This week, SoftBank is conducting a roadshow in New York, seeking to issue $10-20 billion in bonds to repay the $40 billion bridge loan previously borrowed to increase its investment in OpenAI. According to Bloomberg estimates, SoftBank faces a funding gap of at least $20 billion, and the yield on its existing U.S. dollar bonds has already exceeded 8.5%, with pricing approaching junk status.
Meeting postponed, gold price drops rapidly
The "first metaverse stock" bets on "AI-powered game creation"! Roblox (RBLX.US) competes for creator economy dividends, shares surge nearly 13%
On September 11, after Roblox announced new tools for game developers and features for players at its developer conference, the company's stock price rose by more than 12% on Monday.
Crypto prices
More
