SoftBank Shares Slide Along With Ride-hailing Stocks

Shares in Japan’s SoftBank Group have been sliding for three straight days, and closed 5.4 percent lower on Tuesday (May 14), according to a report from Bloomberg.

The company had made it a point to illustrate that it was the world’s largest investor in ridesharing companies, but after disappointing IPOs for both Uber and Lyft, the distinction may have turned into a liability.

SoftBank has lost about $16 billion in market value, as Uber fell almost 20 percent below its IPO price. Masayoshi Son, CEO of SoftBank, said the bank controls 90 percent of the ride-hailing market, including shares in Didi Chuxing, Grab and Ola in India.

SoftBank shares climbed to a record high after it bought back 600 billion yen ($5.5 billion) shares. Now that Uber and Lyft have both underperformed, analysts worry the appetite for large-growth, loss-operating companies may be thinning. SoftBank is also one of the biggest shareholders in WeWork, which loses money regularly in favor of growth but has announced a bid to go public.

Last week, SoftBank invested $20 million in Clip, a Mexican FinTech startup that offers a mobile credit card reader for smartphones. Businesses all across Mexico have adapted the technology as a simple and low-cost way to accept payment, according to Reuters.

The investment is one of the first Latin American deals by SoftBank, as it launches its $5 billion tech fund in the area. The money was part of a $100 million funding round for Clip, and the company’s valuation rose to between $350 and $400 million. The company’s total funding amount so far is about $160 million. Other investors include New York-based investment company General Atlantic.

Some companies think SoftBank’s tech fund will help with growth in the region. “Growth will be faster, more dramatic and more competitive,” said Fernando Gonzalez, a partner at Virginia-based QED Investors and CEO of Mexican FinTech startup Coru.