TLDR
- SoftBank stock fell over 8% on Wednesday after reports its $6 billion margin loan backed by its OpenAI stake hit a snag
- Bloomberg reported talks with potential creditors failed to progress after the loan was already scaled back from an initial $10 billion target
- Asian tech stocks fell broadly, with SK Hynix down 7.5%, Samsung down 6.1%, and TSMC off about 2%
- The Nasdaq Composite dropped 0.97% overnight, dragging Asian tech names lower
- AI-related fundraising, including upcoming IPOs from SpaceX and OpenAI, may be pulling capital away from listed tech stocks
SoftBank Group stock dropped more than 8% on Wednesday after a Bloomberg News report said the company’s attempt to raise $6 billion through a margin loan backed by its OpenAI stake had stalled.
By early morning trade in Tokyo, the stock had fallen nearly 10% to 6,372 yen. The news hit at a time when Asian tech stocks were already under pressure.
Bloomberg reported that talks with potential creditors had failed to move forward. This came weeks after SoftBank had already reduced the loan target from an original $10 billion.
According to the report, SoftBank is now looking at alternative fundraising options. The company may revisit the margin loan plan at a later date.
The financing push is tied to CEO Masayoshi Son’s accelerating AI strategy. SoftBank has committed tens of billions of dollars to AI projects, including the Stargate infrastructure initiative in the United States, and is one of OpenAI’s largest backers.
Asian Tech Takes a Hit
The SoftBank news added to a rough session across Asian tech. SK Hynix fell 7.5% and Samsung Electronics dropped 6.1% in South Korea. LG Display slid 7.6%.
In Taiwan, TSMC fell around 2%. Japanese chip equipment makers Advantest and Renesas Electronics closed down 4.2% and about 2%, respectively.
The declines tracked a weaker Wall Street session. The Nasdaq Composite fell 0.97% and the S&P 500 slipped 0.26%. The iShares Semiconductor ETF dropped 1%.
IPO Pipeline Adding Pressure
There is a growing view that upcoming AI-related listings are pulling investor money away from existing tech stocks.
OpenAI filed confidentially for a U.S. IPO on Monday. SpaceX is set to begin trading on Friday in what is expected to be the largest IPO on record, with a valuation of $1.75 trillion.
Some investors see those listings as fresh catalysts for AI enthusiasm. Others worry they could drain capital from publicly traded tech names.
Andrew Jackson, equity strategist at Ortus Advisors, said the tech volatility could push investors toward defense stocks, particularly in Japan where the government is expected to increase military spending.
“With retail punters gnashing their teeth and looking for something new to play with, heavies could snap back into focus after their recent pullback,” Jackson said, pointing to names like Mitsubishi Heavy Industries and Kawasaki Heavy Industries.
SoftBank stock was last trading down 8.33% on the Tokyo Stock Exchange on Wednesday.
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