Japanese conglomerate SoftBank is the Nasday Whale’ that bought billions of dollars in individual stock options in big tech companies over the past month, driving up volumes and stoking a trading frenzy before a sharp correction on Thursday and Friday, The Financial Times reported.
According to the report, the big investments in the options market is a foray by the Masayoshi Son-led firm into uncharted territory.
Till now, through its $100 billion Vision Fund, Softbank has making investment big investments on privately held technology start ups. It has investments in startups including Uber Technologies Inc. and TikTok owner Bytedance.
in July this year, Masayoshi Son announced a new unit to invest in public markets, similar to a hedge fund in its scope and tactics.
The Wall Street Journal reported that regulatory filings by Softbank indicate the firm bought nearly $4 billion in shares of Amazon, Microsoft, and Netflix, plus a stake in Tesla.
WSJ report said that SoftBank may have spent roughly $4 billion buying call options tied to its stock holdings, but also in other names. It then could profit from the run up in stocks and subsequently unload its position to other parties. The roughly $4 billion in options generated an exposure of around $50 billion.
The options market activity was credited by many analysts for adding froth to the stock market though sharp correction occurred on Thursday and Friday. Nasdaq fell sharply Thursday, declining 5%, and was down another 2.5% Friday. The Nasdaq, from its March low to intraday high this week, was up 83%.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.