SoftBank Group Corp.’s Japanese mobile subsidiary suffered a bitter debut Wednesday on the Tokyo Stock Exchange, slumping 15 percent, hurt by a recent service outage and concerns about the use of parts from Chinese telecom giant Huawei.

Shares fetched an opening price of 1,463 yen ($13) and slid further to end their first day at 1,282 yen ($11), down 15 percent from the IPO price of 1,500 yen announced earlier this month.

Company president Ken Miyauchi and four other executives each rang a bell with a wooden hammer at a festive ceremony celebrating the IPO, which sought to raise more than 2 trillion yen ($18 billion).

SoftBank was listing more than 1.7 billion shares, or about one third held by its parent company. Based on the opening price, the company raised 2.6 trillion yen ($23 billion), the record amount for an IPO on the Tokyo burse, Japan’s Kyodo news agency reported.

The IPO compares with some of the world’s biggest. China’s Alibaba Group raised more than $20 billion when it went public in 2014, and Facebook raised $16 billion in 2012.

Many Japanese retail investors see IPOs as a way to secure profit because shares usually open higher. SoftBank Corp. is also attracting investors with its promised 85 percent dividend payout, much higher than the average of 30 percent among listed companies.

SoftBank’s debut on the exchange saw the company lost one-seventh of its asset value of 7 trillion yen ($62 billion).

“We take the market reaction seriously,” Miyauchi told a news conference after the market closed.

He offered an apology at the outset over a recent service outage problem. “We are bracing ourselves as we set sail into the sea in a difficult environment,” he said. “We’ll take it as a fresh start.”

The listing came about two weeks after a service outage attributed to a software problem affected millions of SoftBank mobile customers in Japan. They were unable to text messages, make payments or buy plane tickets via cellphones during the outage, which was resolved after more than four hours, SoftBank executive vice president Junichi Miyakawa told reporters. The outage also occurred simultaneously at foreign carriers using the same Ericsson program in 10 other countries, he said.

The company also recently acknowledged using equipment made by Huawei, which faces restrictions or bans in other countries because of security concerns. The Japanese government’s cybersecurity committee recently adopted a guideline banning Huawei products in future purchases of government equipment.

“It would be unavoidable to switch (Huawei) to European vendors in core equipment,” Miyauchi said Wednesday. “We are always considering alternatives to hedge risks.”

SoftBank Group’s chief, Masayoshi Son, has also drawn investor concerns for his relations with Saudi Arabian Crown Prince Mohammed bin Salman after the killing of Saudi journalist Jamal Khashoggi.

About half of SoftBank Group’s $100 billion Vision Fund investment money comes from the kingdom. The fund has been investing in solar projects and artificial intelligence.

The parent SoftBank wants to add cash for its investments not linked to Saudi Arabia. It has invested in a range of companies globally, such as U.S. wireless company Sprint, British IoT company ARM and Chinese e-commerce Alibaba.

SoftBank, which created the Pepper companion robot, was founded in 1986 as a software, broadband and fixed-line telecommunications company. It was the first mobile carrier to offer the Apple iPhone in Japan.

___

SoftBank Corp.'s CEO Ken Miyauchi speaks during a press conference in Tokyo, Wednesday, Dec. 19, 2018. (AP Photo/Koji Sasahara)
SoftBank Corp.’s CEO Ken Miyauchi speaks during a press conference in Tokyo, Wednesday, Dec. 19, 2018. (AP Photo/Koji Sasahara)
SoftBank Corp.'s CEO Ken Miyauchi speaks during a press conference in Tokyo, Wednesday, Dec. 19, 2018. (AP Photo/Koji Sasahara)
SoftBank Corp.’s CEO Ken Miyauchi speaks during a press conference in Tokyo, Wednesday, Dec. 19, 2018. (AP Photo/Koji Sasahara)
SoftBank Corp.'s CEO Ken Miyauchi rings the bell during a ceremony at the Tokyo Stock Exchange in Tokyo Wednesday, Dec. (AP Photo/Koji Sasahara)
SoftBank Corp.’s CEO Ken Miyauchi rings the bell during a ceremony at the Tokyo Stock Exchange in Tokyo Wednesday, Dec. (AP Photo/Koji Sasahara)
CORRECTS NAME OF KONUMA - SoftBank Corp.'s CEO Ken Miyauchi, left, poses with Yasuyuki Konuma, director and executive officer of Tokyo Stock Exchange during a ceremony at the Tokyo Stock Exchange in Tokyo, Wednesday, Dec. (AP Photo/Koji Sasahara)
CORRECTS NAME OF KONUMA – SoftBank Corp.’s CEO Ken Miyauchi, left, poses with Yasuyuki Konuma, director and executive officer of Tokyo Stock Exchange during a ceremony at the Tokyo Stock Exchange in Tokyo, Wednesday, Dec. (AP Photo/Koji Sasahara)
SoftBank Corp.'s CEO Ken Miyauchi, center, poses for a photo with other executives during a ceremony at the Tokyo Stock Exchange in Tokyo Wednesday, Dec. (AP Photo/Koji Sasahara)
SoftBank Corp.’s CEO Ken Miyauchi, center, poses for a photo with other executives during a ceremony at the Tokyo Stock Exchange in Tokyo Wednesday, Dec. (AP Photo/Koji Sasahara)
FILE - In this July 20, 2017, file photo, SoftBank Group Corp. Chief Executive Officer Masayoshi Son, left, speaks during a SoftBank World presentation at a hotel in Tokyo. ($18 billion). (AP Photo/Shizuo Kambayashi, File)
FILE – In this July 20, 2017, file photo, SoftBank Group Corp. Chief Executive Officer Masayoshi Son, left, speaks during a SoftBank World presentation at a hotel in Tokyo. ($18 billion). (AP Photo/Shizuo Kambayashi, File)
In this Dec. 4, 2017, file photo, people walk in front of Soft Bank shop in Tokyo. SoftBank Group Corp. ($18 billion). (AP Photo/Koji Sasahara)
In this Dec. 4, 2017, file photo, people walk in front of Soft Bank shop in Tokyo. SoftBank Group Corp. ($18 billion). (AP Photo/Koji Sasahara)
SoftBank Corp.'s CEO Ken Miyauchi, left, arrives at the Tokyo Stock Exchange in Tokyo, Wednesday, Dec. (AP Photo/Koji Sasahara)
SoftBank Corp.’s CEO Ken Miyauchi, left, arrives at the Tokyo Stock Exchange in Tokyo, Wednesday, Dec. (AP Photo/Koji Sasahara)
A securities firm's monitor shows a stock price of Softbank in Tokyo Wednesday, Dec. 19, 2018. SoftBank Group Corp. (AP Photo/Koji Sasahara)
A securities firm’s monitor shows a stock price of Softbank in Tokyo Wednesday, Dec. 19, 2018. SoftBank Group Corp. (AP Photo/Koji Sasahara)
SoftBank Corp.'s CEO Ken Miyauchi attends a press conference in Tokyo, Wednesday, Dec. 19, 2018. SoftBank Group Corp. (AP Photo/Koji Sasahara)
SoftBank Corp.’s CEO Ken Miyauchi attends a press conference in Tokyo, Wednesday, Dec. 19, 2018. SoftBank Group Corp. (AP Photo/Koji Sasahara)

Source: The Associated Press

Sign up to receive our latest news!

By submitting this form, I agree to the terms.