The eyes of the investing world were turned towards Japan recently after SoftBank Group Corp (OTC:SFTBY) announced that it would be preparing for an IPO which it expects could generate as much as $21 billion. The high-profile tech conglomerate has been building an impressive name for itself by investing heavily in the tech industry as of late, and has recently drawn positive press coverage thanks to its sensational robotics acquisitions.
Here are the inside details of Softbank’s forthcoming IPO that we know about right now, and what investors need to know about the company before it enjoys one of the biggest market debuts in history.
One of the world’s leading tech conglomerates
Many Westerners may be unfamiliar with Softbank (TYO: SB), but that doesn’t mean the company is some sort of small fish. As a matter of fact, Softbank is one of the world’s leading tech conglomerates with its fingers dipped into a myriad of investment pots. The company most recently drew international headlines and praise after unveiling an adorable “human-like” robot that ignited fervor amongst excited consumers and investors alike. The conglomerate has been diversifying its tech holdings in recent years, too, and shows few signs of slowing down anytime soon.
Now the company intends to scoop up some 2.4 trillion yen, or roughly $21 billion, by offering stock in its mobile telecoms unit to a hungry body of investors clamoring to get in on the action. The market debut could effectively split Softbank in two by severing its mobile telecoms unit away from its tech investment business.
The company is retaining the right to sell additional shares to investors if its market debut goes well, meaning its IPO could ultimately produce as much as $23 billion in the rosiest scenario for Softbank. Nonetheless, present information about the company’s offering is tentative, and finalized information won’t be made available to the public nor investors until December 10th. Shares wont being changing hands in Tokyo until December 19th.
The press release is missing some information
The press release that announced that Softbank would finally be making its market debut was expected, as analysts have been waiting for the company to release more information since it announced its IPO intentions earlier this year. The final press release was the first time that Softbank revealed a target figure for its market debut, however, and offers a concise summary of the company’s present operations for potential shareholders to peruse.
Softbank’s reputation among consumers for its tireless innovation and relatively affordable prices make it all but guaranteed to dominate the market as one of its top players for the foreseeable future. A decision by its rival NTT Docomo, Inc. (T:9437) to slash prices for premium photographies could frustrate that strategy, however, and force Softbank to push prices for its mobile products even lower after its debut. Critics allege that the company’s announcement to cut prices is well-timed to harm Softbank’s debut, however, so fears about competition should be taken with a grain of salt.
Virtually all shares of Softbank will be sold in Japan, mostly to retail investors. The company intends to take almost all the cash it derives from its market debut and funnel it towards tech innovation; its famous CEO Masayoshi Son has garnered global headlines for his involvement in $100 billion tech investment funds in the past. In other words, investors should expect Softbank to remain a top dog in the pursuit of lucrative new technologies for years to come. While little is known about Softbank’s forthcoming market debut, investors have plenty of reasons to believe that the massive tech conglomerate will enjoy one of the largest IPOs in history as it seeks to vacuum up a greater share of the Japanese tech market.