SoftBank Group Corp. (JPTSE:9984) shares gained on Wednesday, rebounding back from a 52-week low on Tuesday. This happened as Nvidia Corp. considered pulling out of its deal to buy Arm Ltd. from the Japanese investment behemoth.
Following severe pushback from regulators and customers, Bloomberg News reported that Nvidia was quietly prepared to cancel its purchase of chip designer Arm Ltd, a British semiconductor and software design company that has been owned by the conglomerate since 2016.
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SoftBank founder Masayoshi Son had hailed the company’s deal with Nvidia as a big gain that would enable greater investment in technology startups. This came after the value of the deal rose to over the $40 billion mark in September 2020, after a huge spike in Nvidia’s share price.
However, if this Nvidia deal fails to go through, SoftBank is expected to pursue an initial public offering for Arm Ltd., this is according to people familiar with the company’s strategies.
SoftBank technical and fundamental analysis
In The Tokyo Stock Exchange, SoftBank stock dropped as much as 2.5 percent before turning around and ending the morning session 3.3 percent higher.
For a huge part of 2021, SoftBank stock traded in a pyramid pattern. The 52-week high was at around 10,619 Japanese yen. However, after hitting those high, the stock has been on a downtrend ever since.
In mid-October, the stock found some support at around 6066 Japanese Yen; however, that support level was broken in November, and the stock continued the downtrend.
Is Softbank expected to grow?
After pouring little money into its home country in the past, SoftBank now wants to grow its Japan investment team for its Vision Fund, and they plan to do this by adding staff and stepping up the company’s deal-making.
SoftBank’s portfolio is divided across three regions that include 42% in the Americas, 28% in Europe, and 15% in China. SoftBank would most likely need to diversify its investments in the future to ensure the steady growth of the company.
In regards to this, the company’s deal with Nvidia would have been a great revelation. However, Nvidia withdrawal from this deal won’t do SoftBank stock any favours.
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