Key facts
- SoftBank's stock has fallen by approximately 20% in the past week.
- Negotiations for a margin loan of at least $6 billion, secured by SoftBank's OpenAI stake, have stalled.
- Lenders expressed concerns regarding OpenAI's valuation and its ability to meet internal growth targets.
- SoftBank has committed over $60 billion to OpenAI.
- The company faces a March 2027 deadline to repay a $40 billion bridge financing package.
SoftBank's stock has experienced a significant decline, falling by approximately 20% in the past week, largely due to stalled negotiations for a margin loan of at least $6 billion. This loan was intended to be secured by SoftBank's stake in OpenAI, but discussions reportedly broke down due to concerns from potential creditors about OpenAI's valuation and its ability to meet ambitious internal growth targets.
Reports indicate that lenders struggled to price the private OpenAI stake as collateral, especially after SoftBank had already reduced its initial loan target from $10 billion. While SoftBank had secured around $5 billion in commitments, the negotiations ceased. Investor scrutiny has intensified on SoftBank's substantial commitment of over $60 billion to OpenAI, particularly with the advances made by rival AI company Anthropic.
Adding to balance sheet concerns, SoftBank must repay a $40 billion bridge financing package by March 2027, which was used to fund its OpenAI investments. Despite a broader market rebound in Japan, tech stocks faced renewed global pressure, with the Nasdaq and S&P 500 declining, amplifying SoftBank's company-specific selling.
In a notable market shift, SoftBank briefly surpassed Toyota as Japan's most valuable company, a position not held since the dot-com bubble peak in February 2000. However, Toyota has since reclaimed the top spot. Other companies like Kioxia, a memory maker, have seen significant gains, driven by AI-related demand. On the analyst front, Nomura raised its price target for SoftBank to ¥9,590 from ¥9,090, citing higher medium-term earnings forecasts for Arm, but this positive outlook failed to counteract the current selling pressure.