Hefty losses in the portfolio of Japanese investment giant SoftBank could push its chief Masayoshi Son to consider delisting the firm via a management buyout, analysts have suggested.
The prolific tech investor has been hit by nearly $50bn of losses this year as its tech-heavy portfolio was battered by plunging valuations amid rising interest rates and soaring inflation.
Chief Masayoshi Son has privately mulled taking the firm private on several occasions over the past three years, according to sources cited by the Financial Times, but has previously rejected proposals
Analysts have now suggested the plans could be back on the table however after the rout this year and plans to sell off some of its assets.
SMBC Nikko analyst Satoru Kikuchi said the listing of British chip maker Arm would make SoftBank solely an investment and fundraising vehicle with no need to be a listed firm.
“It is raising these funds with debt, so there is little reason to be listed on the stock market,” said Kikuchi, as reported in the FT.
Kikuchi and other analysts said Son had pushed through a notable change of strategy prioritising defence
“We think changes in the very form of the company, for example a management buyout, could be coming in the not-too-distant future,” Kikuchi added.
Shares in SoftBank have plunged over seven per cent in the past two days. SoftBank has been contacted for comment.
The speculation comes as SoftBank gears up for a spate of exits from its investments this year as it looks to soften the blow of nearly $50bn losses in the six months to June.
SoftBank chief Masayoshi Son said on Monday that he is in discussions to sell asset manager Fortress, without commenting on a valuation, while it also raised $2.4bn selling its shares in T-Mobile US during the latest quarter alongside unloading a variety of other holdings.
The firm revealed in its second quarter trading update that it had sold its stake in ride-hailing firm Uber between April and July at an average price of $41.47 per share.
Analysts have warned that the firm now faces dwindling returns if it looks to sell its assets to raise cash.
“Most of the portfolio is underwater, making the case to sell harder to justify,” Redex Research analyst Kirk Boodry wrote in a note.
Boodry calculated that SoftBank sold the final tranche of Uber shares at a loss and generated a total return of just $1.5bn on the stake.