Thomson Reuters
- SoftBank is planning to sell its stake in Nvidia as the chipmaker's shares keep sliding, Bloomberg reported on Tuesday.
- The Japanese investor quietly acquired a $4 billion stake in Nvidia in early 2017, and later transferred the holding to its Vision Fund.
- Nvidia shares have been under pressure since the start of a large-cap tech correction that began in early October.
- Watch Nvidia trade live.
Nvidia slid as much as 3.06% to $147.15 a share on Tuesday after a report said that the Japanese investor SoftBank was planning to dump its stake in the chipmaker.
The Japanese investment bank plans to sell its stake in Nvidia as shares keep sinking, Bloomberg reported, citing sources familiar with the matter. The trade could generate $3 billion in profit for Softbank, the sources said.
SoftBank quietly acquired a $4 billion stake in Nvidia in early 2017, making it the fourth-largest shareholder. The
holding was later transferred to the Vision Fund, SoftBank’s leading technology investment fund.
Nvidia shares have been under pressure since the start of a large-cap tech correction that began in early October. The chip giant also reported brutal third-quarter earnings that missed analysts' expectations last month, causing the shares to get cut in half from its all-time high of $292.75 reached on October 1.
The weaker-than-expected financial results were largely due to slow sales of GPUs for cryptocurrency mining. Bitcoin, the largest cryptocurrency, is sitting at its lowest level in more than a year. Management in August warned that it was expecting "essentially no cryptocurrency" business moving forward.
Also at stake is a slowdown in semis demand because of Trump's trade war.
"Companies have recently pointed to tariffs (and trade more generally) as the primary reason for a recent slowdown in demand," especially for the semiconductor industry that relies heavily on the manufacturing steps in multiple geographic regions, William Stein, an analyst at SunTrust Robinson Humphrey, recently said.
Nvidia is down 26.7% this year.
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