Japan’s SoftBank saw a 15% slump in the share price of its domestic telecoms business on its first day of trading after its near-record $23.5 billion IPO.
SoftBank floated its Japanese mobile business on the Tokyo Stock Exchange earlier this month, raising a higher-than-expected $23.5 billion. This made it the world’s second biggest IPO after Alibaba’s $25 billion US listing in 2014.
But the company’s market debut flopped, CNN Businessreported. The shares opened below their IPO price before falling 15% during the first trading day.
Softbank has blamed the poor performance on market conditions – the benchmark Nikkei Index has fallen 7% since the start of the month.
But analysts have also attributed the decline to concerns among retail investors that pressure from the Japanese government on mobile operators to reduce tariffs could lead to declining revenues and a potential damaging price war.
SoftBank founder and CEO Masayoshi Son conducted the IPO in order to help raise proceeds for its multi-billion dollar Vision Fund for investments in emerging technologies, and to give investors a choice between investing in the more stable domestic telecoms business or the riskier but potentially more lucrative Vision Fund.