Japan’s Softbank Group, led by Chairman Masayoshi Son, is smiling in the global IPO and M&A craze. Softbank shares price has leaped up a lot this year.
The Wall Street Journal (WSJ) reported that Softbank’s share price has risen 66% this year. Softbank’s stock price hit a record high of 8,306 yen per share on the previous day. About nine months after plunging to 2,687 yen per share in March. When it was the beginning of COVID-19 pandemic.
Softbank shares jump: smart investment on IPO going startups
Softbank’s biggest break was by the successful listing of U.S. food delivery service company Door Dash. Softbank has invested a total of 680 million U.S. dollars in Door Dash over the past two years through its affiliate Vision Fund. Softbank’s stake after capital increase under the IPO of Door Dash is about 22%.
Door Dash jumped nearly 86 percent on the first day of its listing its market capitalization has risen to more than $70 billion. Therefore Vision Fund’s valuation profit amounts to $11.4 billion if simply calculated by the number of shares it owns. It is 17 times the investment.
Another positive factor was the sale of an 80 percent stake in ‘Early Mix’ to Hyundai Motor Group. Roughly, Softbank has made about $880 million in profits As the company’s value is at $1.1 billion. On top of that, there have been reports that Chairman Son is considering delisting through the purchase of his own shares, which helped boost stock prices.
Softbank’s target share price has been rising rapidly due to a series of positive factors. David Gibson, an analyst at Astris Advisory Japan, an investment advisor in Japan, raised Softbank’s target share price from 8,400 yen to 9,810 yen. Citigroup offered a target price of 11,100 yen. This is higher than the highest of 1,111.1 yen recorded in February 2000.