Zhitong Finance learned that, according to people familiar with the matter, although shareholders are concerned about SoftBank's new strategy, the company is still advancing its new publicly listed stock trading business, increasing its stock position to more than 20 billion US dollars.
Some Wall Street traders said that the previous unusual surge in bullish options indicates that SoftBank may once again bet on major US technology stocks.
According to multiple sources, call options betting on Netflix (NFLX.US), Amazon (AMZN.US), Facebook (FB.US), and Alphabet (GOOGL.US) reached $200 million, the highest level since the beginning of 2019, while SoftBank is the most likely buyer behind it, and its large-scale options activity also led to a boom in major technology stocks in August.
The media called SoftBank's options a “Nasdaq whale.” It mentioned that some sources said that the options “swallowed” by SoftBank were too large, and even some people within the company were nervous. However, the scale of such options is likely to continue to expand. “Whales are still hungry.” Market participants, on the other hand, called it a “dangerous gamble,” but the revelation of this news also caused SoftBank stock to be sold off in early September.
Recently, some media also quoted people familiar with the matter as saying that in the past few weeks, SoftBank has also rededicated itself to publicly listed stock trading business, and said that the strategy is currently based on expectations of large market fluctuations during the third quarter results release period, and that SoftBank has always bought bullish options outside of the price. When stock prices rise, they obtain rewards by selling call options at higher prices.
A spokesperson for SoftBank declined to comment on the above news. As it turns out, the earnings release period is particularly difficult to predict. On October 12, the Nasdaq 100 index experienced its biggest increase since April, and the volatility index derived from options also rose.
According to reports, SoftBank founder Sun Zhengyi has been promoting the creation of a stock division within the company and is unwilling to provide more details about his trading strategy. Instead, the company discussed more of a broad strategy to sell assets, reduce debt, and buy back stocks, which was also well received by investors. On Monday, the company's stock rose to a 20-year high, the highest level since March 2000 during the internet boom.
In August, SoftBank announced that the company holds $3.9 billion in shares of companies such as Amazon and Netflix, and these two companies will announce their results on October 29 and this Tuesday, respectively. Since then, SoftBank has bought more shares. While focusing on major technology stocks, SoftBank has also been focusing on smaller companies. Last week, the company invested $215 million in Norway-based education software company Kahoot.