- Tram Ho
It turns out, Masayoshi Son’s conglomerate SoftBank Group may be behind the push on US large-cap technology stocks in recent weeks. The market became active and, in fact, seemed to have forgotten the ongoing COVID-19 crisis.
The Financial Times called Masa Son the “Nasdaq whale” when it came to a bizarre option transaction that the newspaper’s sources said was made by SoftBank.
The Wall Street Journal describes:
“Investors are watching the dizzying rally, and tech stocks’ Thursday slump has left people on a single trade, a huge but shady bet on Silicon Valley. , big enough to pull the market up with it.
The investor behind the transaction, according to people familiar with the matter, SoftBank, has bought options tied to about $ 50 billion in technology stocks.
A period when Apple’s capitalization exceeded $ 2 trillion; Amazon is growing more in a month than it did last year; Tesla founder Elon Musk surpasses Warren Buffett in the ranking of the richest people in the world.
All of these tech giants benefit in some way from the social changes brought about by the pandemic. Demand is increasing from online shopping, online TV, to software solutions to work from home.
Analysts headache with explaining exactly why stocks rise during the summer. While investment managers are confronted with the question: should we stick to a diversified portfolio, do our careful research, or follow the fad?
It’s not uncommon to buy stock options to have such impact on the market, but that’s the prevailing theory. Equity derivatives have become a favorite for already boring individual investors, people without professional money management, those who prefer platforms like Robinhood in the context of COVID-19. .
But with Masa Son, maybe not boring reason.
Investors have been talking about whether SoftBank CEO, 63 years old, is a true visionary or a gambler.
He once talked about a 300-year plan for SoftBank, but it is clear that he needs to focus on the present. Disaster investments in US wireless carrier Sprint Corp or office rental company WeWork hurt his reputation.
After taking investments in WeWork and Uber Technologies, SoftBank had record losses. SoftBank is best known for its Vision Fund, which said last month that it will no longer report operating income.
Bloomberg wrote that betting on Big Tech carries many risks. Some have compared the dominant performance of this stock group to the dot-com bubble that erupted 20 years ago.
“If there are bubbles at big tech companies, this could be attributed to their profits and the way they are allowed to build monopoly power, rather than pricing. Monopoly bubbles are harder to explode. These companies hold lots of valuable data.
However, the bubble has started to flatten this week and news of Masa Son’s influence won’t help. The only thing that can really restrain Big Tech is that such a board wants to be.
Source : Genk