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(Bloomberg) — SoftBank Group Corp.’s stocks soared nearly 20% in Tokyo after reports said two companies backed by the Japanese investor – OpenAI and SB Energy Corp. – are preparing for US initial public offerings.
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OpenAI is preparing to file for an IPO in the coming weeks and is targeting a public debut sometime in the fall, according to a person familiar with the matter. The ChatGPT creator is working with Goldman Sachs and Morgan Stanley to make a a confidential IPO filing as soon as Friday, through the exact timing remains uncertain, the person said.
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Separately, SB Energy, which develops energy infrastructure for data centers, said Wednesday that it would file a confidential draft registration statement for a proposed IPO in the US.
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SoftBank is one of the largest OpenAI shareholders with an about 13% stake. SB Energy has raised more than $1.8 billion over the past year from SoftBank, OpenAI and Ares Management to fund its data center expansion plans.
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The surge, the biggest intraday gain since March 2020, reverses losses from the past week after the company’s earnings. Investors raised questions about the transparency and collateral value of SoftBank’s OpenAI-related assets.
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Today’s buying interest follows a pullback on concerns over financial issues and a rise in Arm Holdings shares, said Ikuo Mitsui, a fund manager at Aizawa Securities.
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“The most important point is the shift toward liquid assets,” Mitsui said, speaking of the OpenAI IPO. “In the past, SoftBank held many unlisted investments, which raised concerns about liquidity and made it difficult to determine a fair market value.”
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“Once these companies go public, SoftBank will gain both liquidity and clear market pricing, making investments easier to evaluate. That should be positive for the share price,” he added.
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The wave of public listings could deliver a two-pronged boost to SoftBank’s balance sheet, including sweeping away question marks on valuation, said analysts Kirk Boodry and Chris Muckensturm at Bloomberg Intelligence in a note. “This could potentially shrink its discount to net asset value, which is back in the high -20% range.”
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These offerings would shorten the company’s path to self-funding, easing SoftBank’s capital burden and free up liquidation for additional investments, they said.
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