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Softbank lost $2.7bn from the Nvidia share crash… so it sold its entire $3.6bn stake

Softbank has ditched its entire $3.6bn stake in Nvidia

Nvidia HQ

Softbank has ditched its entire $3.6bn stake in Nvidia. The Japanese investment bank goliath was one of Nvidia’s largest shareholders – potentially its 4th biggest – and its mammoth share in the GPU company was one of many investments included in its $100bn technology Vision Fund. But that stake has since been liquidated, all $3.6bn of it drained by the end of January.

Softbank had been considering offloading all of its shares in Nvidia since last year, although the deal wasn’t finalised. Sources close to the company had told Bloomberg that the bank had hedged itself against a sudden drop in Nvidia’s stock, protecting itself from any losses, and a good move considering Nvidia’s sharp share decline late last year.

From highs of nearly $290 dollars late last year, Nvidia’s share price has since fallen to $155 over the course of the last few quarters. With 29 million shares in Softbank’s name, the investment fund lost ¥300bn from the share price collapse – with ¥250bn of that recouped by the bank’s “in case of crypto-crash” measures.

Nvidia’s downward turn was in large part due to the sudden crash in cryptocurrency revenue. Its Q4 guidance was lower than analysts had hoped for. Not only that, but the channel was retaining mainstream GPUs like it depended on it – leaving the green team with a rather bleak outlook for the start of 2019.

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And all of that was worsened by the most recent financial drama from the green team. While its share price managed to stay buoyant, Nvidia admitted the last quarter was “a real punch in the gut” after its RTX 20-series sales were not what it expected, and that excess GPU inventory could linger around all the way up until April. From Wall Street darling to Softbank’s rejects in just a few months.

Softbank has managed to weather the storm, however. Despite semiconductors facing a shaky few quarters, the overall tech game generated the Vision Fund a 60% year-on-year operating profit increase during its most recent financial call – coming to $3.99bn.

At the time of writing Nvidia is still trading up 1.37%.