Sam Nussey

TOKYO, Reuters – As investors became more concerned about the declining value of SoftBank Group Corp’s technology investments, the cost to insure against a default of SoftBank Group Corp’s debt rose.

With the collapse of marquee portfolio businesses, their value is soaring. Alibaba Didi Global and (NYSE:) dropped 35% and 64%, respectively, year-to-date. They were hit by China’s crackdown against tech companies and the possibility of higher interest rates, war in Ukraine, and the prospect that Didi Global will be unable to meet its obligations.

SoftBank CEO Masayoshi Son declared last month, “We will definitely sell a good chunk assets”, as he reacted to the failure of Arm’s sale to get a listing for the chip maker.

Some analysts are now questioning the abilities of SoftBank to manage its portfolio in turbulent markets.

Mio Kato from LightStream Research wrote to Smartkarma, “The absence of profitability means that there is no clear ceiling for share prices.” He wrote that he was not convinced by their ability to effectively monetise the holdings.

SoftBank didn’t immediately reply to our request for comment.

SoftBank’s 5 year credit default swaps rose 25 basis points to an all-time high of 2 years, according IHS Markit data. SoftBank’s 2025 unsecured eurobond matured in 6.767% closed Tuesday at the highest level in nearly two years. The yield was at 3.1% as of the end last year.

Redex Research analyst Kirk Boodry stated that while debt investors tend to be more cautious than equity investors, equity investors should still take note of any concerns.

SoftBank shares have fallen to their lowest point in over two years. On Wednesday morning, shares were at their lowest level in two years. They traded flat at 4,273 Japanese yen. In the first days of the pandemic, when valuations dropped rapidly, the share price fell to less than 4,000 yen. A record buyback was initiated by asset sales.