The SoftBank Group’s shares fell by almost 9 percent on Friday, the third consecutive day of decline, following the announcement by the Japanese conglomerate that it had sold all of its shares in U.S. chip giant Nvidia for $5.83 billion.
The stock reduced losses to trade at 5 percent lower by 9 p.m. ET. In case of the losses, it would be the second consecutive week of the selloff following the erased market cap of nearly $50 billion of the conglomerate last week, the biggest company loss of the week since March 2020.
In its recent earnings, SoftBank revealed that it had sold 32.1 million shares of Nvidia in October and reduced its interest in T-Mobile, bringing in $9.17 billion.
Even though the sale of Nvidia came as a surprise to particular investors, the exit of SoftBank has divested out from the U.S. chip giant. Its Vision Fund had built an estimated value of $4 billion in Nvidia shares in 2017 and sold all of them out in early 2019.
Nevertheless, SoftBank still has business relations with Nvidia, the Tokyo-based firm has engaged in several AI projects which also make use of Nvidia technology, such as the Stargate project for data centers in the U.S., for $500 billion.
Some other technology shares in the area also dropped; semiconductor testing equipment maker Advantest and Tokyo Electron, a chip production equipment manufacturer, dropped over 3 percent and 4 percent, respectively.
However, Taiwan’s TSMC, the largest contract chipmaker in the world, dropped 2.04 percent. South Korean memory chip manufacturer SK Hynix fell more than 5 percent, and Samsung Electronics dropped 3.8 percent.
Meanwhile, stocks of Tencent slumped 5.61 percent, and JD.com fell 4.31 percent. In the U.S., tech giants were beaten up overnight. Nvidia and Broadcom dropped by significant margins of 3.6 percent and 4.3 percent; therefore, Google parent Alphabet dropped by 2.8 percent.
