SoftBank stock plunges 13 pc on reports of possible OpenAI IPO delay
New Delhi, June 26
Shares of Japan's SoftBank Group -- which listed on the Tokyo Stock Exchange -- witnessed a slump of 13 per cent after OpenAI may delay its much-anticipated initial public offering, raising concerns over the timing of returns from the Japanese conglomerate's massive investment in the artificial intelligence company, according to multiple reports.
According to them, the sharp decline marked SoftBank's biggest intraday fall in more than three months as investors and traders reassessed expectations that an OpenAI listing would unlock significant value for the technology investor.
Reports suggested that advisers to OpenAI have cautioned that continued volatility in technology stocks could dampen investor appetite for a public offering, potentially pushing the IPO into next year.
SoftBank is expected to hold an investment of around $65 billion in the ChatGPT maker by October.
Expectations of a near-term OpenAI listing had fuelled a rally in SoftBank shares in recent months, helping the company's market capitalisation surpass that of Toyota Motor Corp.
In addition, a public listing of OpenAI is widely seen as a key catalyst for SoftBank as it would provide a transparent market valuation for one of its largest investments and make it easier for investors to assess the value of the group's broader portfolio of privately held technology companies.
Market participants believe such a listing could also narrow the valuation discount at which SoftBank's shares have traditionally traded by reducing uncertainty over the worth of its investment holdings.
OpenAI -- led by CEO Sam Altman -- recently filed confidential paperwork with the US Securities and Exchange Commission for an IPO.
The AI giant company is reportedly working with Goldman Sachs and Morgan Stanley on a potential listing, although the timing remains uncertain.
— IANS
Reader Comments
Market volatility is just part of the game. OpenAI is still a strong player in the AI space, and any delay might actually lead to a better valuation later. Short-term panic is overblown.
As someone who follows Indian IPO markets closely, I can relate. Even in India, companies like Paytm faced delays and valuation corrections. But SoftBank's $65 billion bet is massive! 😅 Hope they know what they're doing.
I think this is a healthy correction. SoftBank's valuation was too dependent on hype around OpenAI. Now with a possible delay, investors are being more realistic. It's just basic economics.
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