SoftBank Winding Down Derivatives After Investor Backlash – Bloomberg News


SoftBank Group Corp is winding down its derivatives holdings following an investor backlash, Bloomberg News reported on Wednesday, citing unidentified sources.

About 90% of the options, which accompanied SoftBank shifting part of its cash reserves into listed tech stocks, will be closed out by the end of December, Bloomberg said. (https://bloom.bg/2JBIuT6)

The investments by SB Northstar, which is headed by Abu Dhabi-based Akshay Naheta, caused consternation in markets, leading to SoftBank being dubbed the “Nasdaq Whale” in some media reports.

Chief Executive Officer Masayoshi Son last month described the derivatives as a “rounding error” when compared to the group’s broader portfolio.

The fair value of SoftBank’s options and futures positions was $2.7 billion at the end of September, compared to $16.8 billion in tech stocks such as Amazon.com Inc.

“(The impact of a wind down) depends on how much you believe SoftBank was the culprit behind all the option volatility and the whale-type moves,” Andrew Brenner, New York-based head of international fixed income at NatAlliance Securities, wrote in a note.

The company’s shares, which have gained 53% this year, were flat in Tokyo trading. A SoftBank spokeswoman declined to comment on the report.

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