- SoftBank (OTCPK:SFTBY) shares rose in Tokyo early this week on expectations that it would spin off its telecoms business, but the unit itself faces a tougher road that could crimp its returns.
- Listing 30% of its SoftBank Corp. (the No. 3 wireless carrier in Japan) for ¥2T would mark the biggest Japanese IPO in nearly two decades.
- But investors in the spin-off face a difficult environment as Japanese regulators work to promote competition and drive down fees.
- Once an upstart that broke a duopoly of NTT DoCoMo (NYSE:DCM) and KDDI (OTCPK:KDDIY), SoftBank is now a giant in tech investing that is likely to attract less sympathy from regulators that are now welcoming new entrants like Rakuten.
- The domestic telecom business has been a stable cash source for SoftBank, and listing the unit means a significant cash injection that can be routed to SoftBank's growing tech investments around the world.
- Now read: You Missed The 2017 Bull Market; Should You Invest Now?
Original article