BREAKING NEWS Authorities release names of 2 people killed in Dodge County crash Full Story
BREAKING NEWS Rochester Fire Department gets recognized for saving dog Full Story
STREAMING NOW: Watch Now

SoftBank's deep ties with Saudi Arabia are making investors nervous

Masayoshi Son used Saudi Arabia's oil riches to help him become one of the world's most powerful tech invest...

Posted: Oct 15, 2018 12:47 PM
Updated: Oct 15, 2018 12:47 PM

Masayoshi Son used Saudi Arabia's oil riches to help him become one of the world's most powerful tech investors. But that relationship is now threatening to come back and bite him.

Shares in Son's Japanese tech company SoftBank plunged more than 7% in Tokyo on Monday as international pressure intensified on Saudi Arabia over the disappearance of prominent journalist Jamal Khashoggi.

Companies

Continents and regions

Middle East

Middle East and North Africa

Saudi Arabia

SoftBank Group Corp

Technology

Jamal Khashoggi

Misc people

Business figures

Masayoshi Son

Banking, finance and investments

Business, economy and trade

Financial markets and investing

Son has built up strong ties with the Saudi government and Crown Prince Mohammed bin Salman. The kingdom provided nearly half the money for SoftBank's $93 billion tech-focused Vision Fund, which has made big investments in startups such as WeWork and Slack.

Asymmetric Advisors, which advises investors about Japanese stocks, removed SoftBank from its list of key recommendations on Monday.

"Although we don't expect this latest diplomatic incident to lead to any sanctions on Saudi, there is always some possibility that some firms will pull out their money from the Vision Fund," Amir Anvarzadeh, a Singapore-based analyst at the firm, wrote in a note to clients.

SoftBank didn't respond to a request for comment.

Other high-profile contributors to the Vision Fund include Apple (AAPL) and US chipmaker Qualcomm (QCOM). The fund has pumped money into around 30 companies, turning Son into the new kingmaker of Silicon Valley.

SoftBank has also committed to help the Saudi crown prince in his efforts to shift the country's oil-dependent economy into areas such as technology and renewable energy.

It's involved in Saudi projects to build a new mega city and the world's largest solar farm.

"This is [a] fantastic opportunity," Son said last year, speaking about the mega-city project as he sat next to bin Salman. "Because of the leadership, because of the location, because of the people in the kingdom, we can make it happen."

Top execs cut ties with Saudi event

Saudi Arabia is now facing growing international pressure to explain the disappearance of Saudi journalist Jamal Khashoggi. Turkey claims to have evidence that Khashoggi, a US resident and columnist for the Washington Post, was murdered inside the Saudi consulate in Istanbul earlier this month — an accusation the Saudi government strenuously denies.

But top business leaders are now distancing themselves from the Saudi government. Executives including JPMorgan Chase (JPM) CEO Jamie Dimon have pulled out of an investment conference taking place in the kingdom later this month. Media sponsors, including CNN, have also withdrawn from the event, which is known as "Davos in the desert."

Son spoke at the conference last year, and several SoftBank executives were listed as participating this year before conference organizers removed all the names from the program posted online. The company hasn't responded to repeated requests for comment on whether its executives still plan to attend this year's gathering.

Business leaders and others have also started putting their ties with the mega-city project on hold. Former US energy secretary Ernest Moniz and former European Commission Vice President Neelie Kroes are among those who have suspended their participation on the advisory board for the city, which is known as NEOM.

SoftBank shares are now down about 20% since their peak earlier this month. They have also taken a hit from a wider sell-off in global tech stocks.

Article Comments

Mason City
Overcast
20° wxIcon
Hi: 35° Lo: 23°
Feels Like: 8°
Albert Lea
Overcast
19° wxIcon
Hi: 35° Lo: 24°
Feels Like: 9°
Austin
Overcast
21° wxIcon
Hi: 36° Lo: 25°
Feels Like: 12°
Charles City
Overcast
23° wxIcon
Hi: 33° Lo: 22°
Feels Like: 13°
Rochester
Overcast
21° wxIcon
Hi: 34° Lo: 23°
Feels Like: 9°
Sunny and cooler day for Friday
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Judge halts Honken execution

Image

It's all for the coach

Image

Thanksgiving for $100 or less?

Image

West Hancock wins state

Image

Chris' PM Weather Forecast 11/21

Image

Turkey Feast on a budget

Image

Preventing Suicide in Ag Communities

Image

Eagles are State Champs!

Image

NIACC Funding Referendum

Image

MN Kindness Week

Community Events