Tech investors woke up today in minor moods.
Japanese giant on the boards, or SoftBank’s troubles
Japanese hegemon SoftBank Group recorded a very painful decline, dropping a solid 10%. What caused such a sudden capital evacuation? It turns out that the empire’s grand financial plans of Masayoshi Son collided with a wall.
According to Bloomberg News, the company’s efforts to secure at least US$6 billion in margin‑loan credit backed by shares in OpenAI ended in failure.
Although SoftBank says it is exploring alternative financing options and may return to loan talks in the future, market players showed no patience. For a giant that put everything on a single AI card, this is a powerful image and financial blow. When a flagship project hits a snag at the start, speculators flee a sinking ship much faster than usual.
At the close of the Japanese market, SoftBank shares fell by 8.33%, settling at 6,461 JPY.
Chart. SoftBank share price
Source: TradingView.
See also: Elon Musk capitulates in Europe. The result of a €120 million fine imposed on the billionaire.
Asian domino effect and red on Wall Street
SoftBank’s problems are only the tip of the iceberg for the tech industry, as the downturn is global. It all started across the Pacific, where the tech Nasdaq Composite fell 0.97% and the S&P 500 lost 0.26%.
The short‑lived rebound of semiconductor manufacturers quickly lost momentum, perfectly reflected by the drop of the iShares Semiconductor ETF by 1%. Asia raised the alarm in the worst possible style. Japanese chip‑equipment makers such as Advantest and Renesas Electronics recorded declines of 3.8% and 3.4% respectively.
South Korea was hit even harder, where RAM leader SK Hynix (which recently signed a deal with Nvidia) fell by over 8%, and Samsung Electronics lost 7.45%. The post‑battle landscape is supplemented by Samsung SDI with a drop above 5% and LG Display losing almost 9%.
Even Taiwan’s tech bastion trembled – TSMC lost about 2%, and key Apple supplier Hon Hai Precision Industry saw a discount of over 4%.
See also: Nvidia shares crashed! Jensen Huang encourages buying. “Everyone should be very excited.”
Big debuts drain cash from the market
Why did the fuel for growth in a sector that seemed untouchable just moments ago suddenly run out? The answer lies in a new wave of AI project financing that paradoxically starts to cannibalize current market leaders. Upcoming megadebuts pull capital that has so far flowed in a wide stream to public companies.
Last Monday, OpenAI quietly filed for its first public offering (IPO), sparking imagination among players but also forcing them to reshape their portfolios. Moreover, this Friday trading will begin for SpaceX. Elon Musk’s space company enters the arena with a gigantic valuation of about US$1.75 billion, making this debut the largest IPO in history.
For some investors this is another engine for the high‑tech sector, but orthodox analysts warn: such monstrous valuations are a classic sign of market overheating. When free cash is scarce, you must sell old shares to buy new ones, a simple path to correction.
See also: Elon Musk wants your money! SpaceX goes public and generates massive losses.
Source: CNBC.
