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SoftBank To Sell Extra Shares Taking Its IPO Value To A Record $23.5 Billion


SoftBank To Sell Extra Shares Taking Its IPO Value To A Record $23.5 Billion
SpftBank is set to raise Japan's biggest-ever IPO at 2.65 trillion yen (US$23.5 billion) which would make the company a monolithic global tech investor from being considered to be a domestic telecom company of Japan.
1500 yen is the price of a stock that has been fixed by the telcom unit of SoftBank Corp.
It is anticipated that the total amount that would be raised by SoftBank from the IPO would be just short of the $25 billion raised in 2014 by Chinese e-commerce giant Alibaba Group Holding Ltd which is record amount because the Japanese company has also decided to sell off all of the additional shares that it had earlier set aside to cater to agdiitonal demands from investors.
SoftBank plans to make use of the money that it would raise from the IPO for making additional investments in tech start-ups that the company has been doping already with a tech private equity fund of nearly $100 billion which is the largest in the world and has invested in a range of tech companies ranging from very small games makers to U.S. ride-hailing giant Uber Technologies Inc .
"Demand was well above the number of shares on offer," SoftBank Corp said. But the company did not disclose by how much.
The IPO would be launched at the Tokyo Stock Exchange on December 19.
It was just days that the this largest mobile phone network provider in terms of subscriber numbers of Japan belonging to SoftBank was hit by a country wide outage. But its earnings or dividend forecast would not be affected by the disruption, SoftBank said.
However there are other reasons for concern. In Japan, competition in the mobile phone service provider market is et to increase form next year with the planned entry of e-commerce firm Rakuten Inc and despite that, the Japanese government wants mobile phone connectivity service providers to reduce mobile phone charges.
Additionally, according to reports, there are plans by the Japanese government not to purchase any telecommunications equipment from the Chinese tech firm Huawei Technologies Co Ltd. But Huawei also has had a log standing relationship with SoftBank and the companies have jointly carried out testing for the technology driving the fifth-generation (5G) network.
According to reports published in Kyodo News, equipment from Huawei would no longer be used by SoftBank for the current network and for its 5G network. SoftBank has reportedly to lf the media that it is keeping a close watch on the developments in government policy towards Huawei.
And during the incident involving the alleged murder of a dissident journalist by Saudi security forces, there was some concern among investors of SoftBank because the company has close ties with the Saudi government and almost half of the massive Vision fund of the Japanese firm is comprised of money contributed by the Saudi government.
"Retail investors see IPO stocks as profitable," said Naoto Akashi, general manager at SBI Securities which is the largest online brokerage of Japan and is amongst the lead underwriters for the domestic portion of SoftBank's IPO.
"In popular IPOs, there are several cases this year in which we received orders worth over 1 trillion yen for a single deal during book-building period," he said, declining to comment specifically on SoftBank.