Investments

SoftBank Mobile IPO Will Be Japan’s Biggest Ever

SoftBank IPO Will Be Japan’s Biggest Ever

After a tumultuous week, SoftBank will release shares of its initial public offering (IPO) at about $13.25 a share (¥1,500) and raise an estimated $23.5 billion (¥2.65tn), according to a report from Financial Times.

There was some worry about whether SoftBank, a Japanese mobile company, would offer the stock at the price it mentioned earlier in the month, because of a huge outage last week that left millions of SoftBank customers without service for hours.

The outage was due to a software glitch that was tracked to SoftBank supplier Ericsson, but not before huge, angry crowds descended upon SoftBank stores in Tokyo and Osaka. Many customers took to social media to bash the company.

SoftBank shares closed down 3.5 percent on Monday after a month-long low, exasperated by the outage. However, in a regulatory filing on Monday, it set the expected pricing for the IPO.

Most of the shares being sold – about 90 percent – are going to retail investors. That uneven number led the company to make TV ads to promote interest in the shares. Some brokerage houses even sent employees door-to-door to pitch the shares to everyday Japanese people.

Unfortunately, the news of the outage, as well as the swelling Huawei dispute and the subsequent arrest of CFO Meng Wanzhou, cast a shadow on the proceedings. Japan is reportedly considering whether to ultimately ban Huawei products from being purchased by the government.

SoftBank and Huawei have a high-profile relationship. SoftBank Founder Masayoshi Son was an early advocate of Huawei and used its equipment on its network. The company said it would abide by Japanese government policy and take a wait-and-see approach to picking a vendor for its next-generation 5G networks.

The shares, which will be Japan’s biggest offering ever, are set to begin trading on Dec. 19. Analysts are predicting volatility in the first few weeks.

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