SoftBank reportedly planning to sell Nvidia stake next year
Japanese multinational conglomerate SoftBank is reportedly planning to sell its stake in GPU maker Nvidia next year.
People familiar with the matter told Bloomberg that the Japanese company could make up to $3bn in profit from the sale.
No final decision has been made yet, according to the report.
SoftBank currently has an equity stake in Nvidia and has constructed a so-called collar trade of about $6 billion – protecting investors from share price volatility.
The sale would come in tranches that begin to expire early 2019 with the average price of options between $230 and $240.
However, SoftBank may decide not go ahead with a sale of its stake if the chipmaker’s share price rallies.
According to Bloomberg: “SoftBank quietly amassed a $3 billion stake in Nvidia in early 2017, making it the fourth-largest shareholder. The holding was later transferred to the Vision Fund, SoftBank’s giant technology investment fund.
“The value of SoftBank’s Nvidia’s stake peaked at $7 billion in September, and the Japanese investor would get close to $6 billion if it were to exercise all of its options at their average strike price.”
Shares in Nvidia are currently approximately 48% lower than their peak in early October. The chipmaker has been affected by weaker demand and growth prospects. Nvidia’s fourth-quarter outlook was worse than expected and cited weakness in its gaming division and a drop in demand from cryptocurrency miners.