Softbank IPO Disappoints Whilst Its Prospects Are High
Investingmoney.biz | Dec 20, 2018 03:20AM ET
The Japanese tech giant Softbank Group Corp. (T:9984) had a disappointing debut on the Tokyo stock market. The firm raised as much as 2.6 trillion yen ($23bn) by selling shares at 1,500 yen each in one of the world's largest ever stock offerings.
But by the close of trade in Tokyo, shares were down 14.5% from the price set for its initial public offering. This IPO is the 2nd biggest share sale in the world after Alibaba (NYSE:BABA) in 2014.
What is Softbank?
Softbank began as a Japanese telecoms company but has since become a technology conglomerate through various deals and investments.
Some of its deals include buying UK chip firm ARM Holdings (LON:ARM) for £24bn ($30.1bn), investing $1bn in satellite start-up OneWeb, and setting up a venture fund with Saudi Arabia.
Softbank has also partnered with Toyota to develop transport services using autonomous vehicles. The firm is run by Japanese billionaire Masayoshi Son.
Recently, the firm has unveiled a robot called Pepper, which it says can read human emotions. It uses an "emotional engine" and a cloud-based artificial intelligence system that allows it to analyse gestures, expressions and voice tones.
The firm said people could communicate with it "just like they would with friends and family" and it could perform various tasks. Pepper will be on sale for around €2,000.
Growing market – should we invest?
Japan is considered one of the world's biggest robot markets. According to some estimates, its overall robotics market was worth about 860bn ($8.4bn; £5bn) yen in 2012.
A rapidly ageing population, coupled with a falling birth rate, the demand for robots is expected to increase further.
The growth is expected to come not only from businesses looking to offset labour shortages and rising wage costs, but also from households seeking an alternative to paying for care workers for elderly relatives.
We have already discussed the growth prospects from the Artificial Intelligence & Robotics sector in these two articles below:
For those who prefer a direct stock option however, Softbank could be the answer!
Although the one trading in the Tokyo Exchange might not be available to European investors, one can also benefit by investing the SoftBank Group Corp shares which trade both in the US and Europe.
As we can see from the chart below, the stock is currently close to a nice resistance way back in 2014 and 2015.
Furthermore, the company has been making very healthy revenues which has been growing year on year.
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