SoftBank mobile unit makes tepid debut on Tokyo market

19, Dec. 2018


TOKYO, Kyodo - SoftBank Group Corp.'s mobile phone unit debuted Wednesday on the Tokyo stock market, with its opening price falling short of its initial offering price of 1,500 yen ($13.3) in Japan's biggest initial public offering.

Shares of SoftBank Corp. opened at 1,463 yen on the first day of trading on the First Section of the Tokyo Stock Exchange, 2.5 percent below the IPO price, amid concerns over the outlook for the mobile phone unit due to repeated requests by the government to lower service fees and intensifying competition.

The market capitalization of the mobile phone service operator is estimated at 7,003.5 billion yen based on the opening price, the highest on the Tokyo bourse since Japan Post Holdings Co.'s listing in 2015 with a market valuation of 7.34 trillion yen.

Nippon Telegraph and Telephone Corp. logged Japan's largest ever market capitalization based on the opening price in 1987 at 24.96 trillion yen.

SoftBank Group raised 2.65 trillion yen by offering 1.76 billion shares, or a 36.85 percent stake, it held in the mobile phone unit in Japan's largest-ever IPO.

The parent company is shifting its focus to investment in global tech start-ups such as semiconductor designer ARM Holdings and graphics chipmaker Nvidia Corp. through its nearly $100 billion Saudi-backed Vision Fund.

"I would like to use the money raised through the IPO for additional investments in the Vision Fund and to pay back debt," SoftBank Group CEO Masayoshi Son said at a press conference last month.

SoftBank Group and its subsidiaries owed as much as about 18 trillion yen in total as of September this year, weighing on the share price of the telecommunication and investment giant, brokers said.

Japanese e-commerce giant Rakuten Inc. will become the fourth major mobile phone carrier in October 2019 joining the three current dominant operators NTT Docomo Inc., KDDI Corp. and SoftBank Corp. (Kyodo)