Softbank shares plummet amid concerns over Saudi ties

“You might find a lot of investors not willing to take their money”

National /
Oct.October 15, 2018 04:00 PM

Masayoshi Son and Mohammed bin Salman in New York (Credit: Getty Images)

SoftBank Group’s shares sank Monday amid investor concerns that the firm’s ties to the Saudi Arabian government could hurt it in the wake of journalist Jamal Khashoggi’s disappearance.

Saudi Arabia is the biggest investor in Softbank’s $100 billion Vision Fund, which owns stakes in WeWork, brokerage Compass, property insurer Lemonade, and construction company Katerra, among other firms.

Khashoggi, a well-known critic of Saudi Arabia’s regime, disappeared after walking into the Saudi consulate on Oct. 2. Turkey’s government claims he was murdered by Saudi authorities and then dismembered. In response, executives at some major U.S. companies announced they would no longer attend the “Davos in the Desert” conference hosted by the country.

SoftBank’s shares on Monday saw the steepest price drop in two years, Bloomberg reported. Some analysts worry that SoftBank’s Saudi ties could make it less popular with startups.

“If the Saudis are implicated in the murder, you might find a lot of investors not willing to take their money,” Sanford Bernstein analyst Chris Lane told Bloomberg. “This could start to freeze the Vision fund out of future deals. This also potentially puts Vision Fund II at risk.”

After committing $45 billion to the Vision Fund, Saudi Arabia’s crown prince Mohammed bin Salman also pledged to invest billions in SoftBank’s next venture capital fund.

Last week, the Wall Street Journal reported that SoftBank is in talks to buy a majority stake in WeWork, which could be worth up to $20 billion. [Bloomberg] — Konrad Putzier 


Related Articles

arrow_forward_ios
Steve Witkoff and Ian Schrager in front of the iconic PUBLIC hotel escalators. (PUBLIC, Getty)
EB-5 fund alleges Schrager, Witkoff siphoned money from Public Hotel
EB-5 fund alleges Schrager, Witkoff siphoned money from Public Hotel
Best Buy has closed about 20 of its big-box stores in each of the past two years (iStock)
Best Buy lays off 5,000 staffers, increases store closures
Best Buy lays off 5,000 staffers, increases store closures
Ryan Serhant and Gary Barnett on Development Slowdown in Pandemic
Coffee Talk: Extell’s Gary Barnett and Ryan Serhant
Coffee Talk: Extell’s Gary Barnett and Ryan Serhant
Cushman & Wakefield CEO Brett White
Cushman reports 10% drop in revenue in 2020
Cushman reports 10% drop in revenue in 2020
Central Queens Academy's Ashish Kapadia and United's Chris Jiashu Xu with a rendering of 88-08 Justice Avenue (Linkedin, iStock)
Charter school takes 85K sf in Queens condo building
Charter school takes 85K sf in Queens condo building
(IStock illustration by Kevin Rebong)
Smaller cities look to cash in on shift to remote work
Smaller cities look to cash in on shift to remote work
421-427 East 14th Street (Google Maps, iStock)
Stuy Town to get new 17K sf grocery store
Stuy Town to get new 17K sf grocery store
Photo illustration of Mayor Bill de Blasio as Uncle Sam (iStock, Getty/Illustration by Kevin Rebong)
NYC has $1.3B in unpaid property taxes
NYC has $1.3B in unpaid property taxes
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...