TLDR
- SoftBank is in talks with investment banks about a $10B to $20B bond sale, potentially launching as early as September.
- The proceeds would help repay a $40 billion bridge loan secured earlier this year to fund its OpenAI investment.
- SoftBank’s total OpenAI investment is expected to reach around $64.6 billion, giving it a 13% stake.
- SFTBY closed Tuesday at $16.04, up 1.71%, but has dropped more than 12% over the past five days.
- Two Wall Street analysts rate the stock a Hold, with TD Cowen setting a $20 price target.
SoftBank (SFTBY) closed Tuesday’s session at $16.04, up 1.71%, even as the stock has shed more than 12% over the past five days.
The Japanese investment group is now weighing a bond sale of between $10 billion and $20 billion. The bonds could be issued in U.S. dollars or euros, with a potential launch as early as September.
The funds would go toward repaying a $40 billion bridge loan SoftBank took out in March 2026. That loan was arranged mainly to support a fresh round of investment in OpenAI, alongside general corporate needs. It matures in March 2027.
SoftBank originally agreed in February to invest an additional $30 billion in OpenAI across three $10 billion payments. The first two were completed in April and July. The final payment is due on October 1.
Once that last payment clears, SoftBank’s total investment in OpenAI is expected to sit at around $64.6 billion, giving it roughly a 13% stake in the ChatGPT maker.
No final decision has been made on the bond sale. The size, timing, and structure of the offering are still being worked out, and SoftBank told Bloomberg it is looking at various refinancing options.
SoftBank Also Explores Collateral Borrowing
In addition to the bond sale, SoftBank has recently reopened talks to borrow $10 billion using its OpenAI stake as collateral. That would give the company another avenue to manage its debt load without selling assets.
The scale of SoftBank’s AI financing is hard to miss. Across the broader market, companies have borrowed over $410 billion in the bond market for AI infrastructure and related investments so far this year.
Wall Street Stays Cautious on SFTBY
Analysts at TD Cowen and Jefferies both carry a Hold rating on SFTBY. TD Cowen’s Krish Shankar has a $20 price target on the stock, which sits above the current trading price of around $16.
On a valuation basis, SFTBY looks stretched. GuruFocus puts the GF Value at $8.86, suggesting the stock is trading at a steep premium to its estimated fair value. The company’s Price-to-Sales ratio is well above its historical median of around 1.6x.
SoftBank is currently unprofitable and cash-flow negative, which limits the use of traditional earnings-based valuation tools. Its GF Score sits at 69 out of 100, with a financial strength rating of just 3 out of 10.
No gurus have added or trimmed positions in SFTBY in recent months, and there has been no insider buying or selling activity in the past three quarters.
SFTBY closed Tuesday at $16.04, up 1.71% on the day.
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