‘Nasdaq whale’ SoftBank may have helped trigger the stock-market’s brutal rout

According to a report by Financial Times, the trigger for a seismic stock-market slump Thursday and Friday that has erased weeks of gains for a frothy U.S. stock market, may have been embattled investment firm SoftBank.

U.S. stocks indexes riseMark DeCambre for MarketwWatch:

The report from the London-based financial paper says that Japanese investing conglomerate SoftBank has been loading up on options in technology stocks over the past several months that contributed to the rally and may have been the market vulnerable to the punishing declines that equity markets have been experiencing over the past 24 hours.

The FT, quoted one investment banker as describing the options purchases that SoftBank made as “dangerous” bets on the market… The FT report suggests the SoftBank investment fund may have been purchasing bullish call options.

The Wall Street Journal wrote on Friday that SoftBank bought options tied to billions of dollars worth of individual tech stocks, which may have included bullish bets on Tesla and Apple.

The reported “aggressive move into the options market” for SoftBank would mark a new chapter for the investment firm, which has traditionally made big bets on start-ups through its $100 billion Vision Fund, including those for office-sharing platform WeWork, which have proved a black eye for the company run by Masayoshi Son.

MacDailyNews Take: The market and Apple (after the recent rapid rise) were ripe for some consolidation as most long term investors understand. Short time traders will do what they do. Again, you’ve got to take the bad with the good and, thankfully, AAPL shareholders have had a lot of good so far this year. Thursday’s close of $120.88 is the lowest since just August 20th – a mere 10 trading days ago. Apple stock is still up 65% since the start of the year which must not be named, and up 127% over the past twelve months. 🙂

23 Comments

  1. Unlike Socialists, smart but immoral Capitalists have traditionally triggered downturns and upturns in order to profit from it, usually from insider trading too.

    1. And socialists, especially the, MMT’rs (Magic Money Time), like to spend what’s not in the bank. Both the immoral & greedy capitalists and the ignorant spend-what’s-not-there folks, create instability for the rest.

      Interestingly, both can and do feed off the policies of the other…in greedy and controlling ways.

      1. I’ll add…we are amidst the most vigorous MMT experiments in history and I have found no one of any stripe (with expertise) that paints the “back-end” with much hope–as in recovery of a normal, or healthy kind.

        Spending beyond one’s means, govt or indi, has concrete and, potentially long term deleterious effects. Money doesn’t do “magic” very well…at least for very long.

            1. I am not discussing your thinking. You have wavered between fiscal responsibility and giving a free pass to the most corrupt administration in US history on these forums for years. I respect the monetary responsibility. But the Trump Cult is irresponsible as it gets on all issues across the board, especially on money. Why don’t you call that out?

            2. And, your presentation of the debt graph illustrates your preferential bias…it borders on deceptive.

              The “ramp” used to augment a point, as if conclusively true, is nothing but tribal illness. Our financial problems didn’t start with the V, or Trump, or Obama, or Bush. And no, Clinton wasn’t the balanced-budget wizard. Some non-biased tribal-free reading would help your mind.

            3. It’ “funny” as you apparently can’t read without your bias corroding your reading comprehension.

              I said, “we are amidst the most vigorous MMT experiments in history,” and my disfavor is crystal clear, but you are oblivious.

            4. @ Ronner:

              You said:

              your presentation of the debt graph illustrates your preferential bias

              I don’t understand what you are trying to say. The facts are plain. Donald campaigned with constant attacks on his predecessor’s economic leadership. But as the objective CBO data shows, Donald accelerated spending while slashing taxes on the top earners and of course corporations that were already hoarding cash overseas because they did not know what to do with the enormous liquidity that near zero interest rates show. You cannot argue that the graph has a political bias, it reports that the Donald trickledown stimulus didn’t work at all. It shot up the deficit while doing nothing to improve the economy before Covid19 hit.

              I agree with Deficts Matter. Donald has destroyed the US ability to finance itself for years to come. It will take some time for the pain to cut really deep, but when inflation swings higher again, which it eventually must do, the unsustainable debt will crush the USA, and emerging countries will do their banking elsewhere. The USA has been digging a debt hole for decades, bet never as fast as the last 3 administrations. Donald promised to solve it, and he lied. As usual.

          1. In the current MMT practices, deficits and debt do not matter as long as there is no shortage of products and services, but this may change as the wealthy accumulate more and more free money while the non-wealthy lose more and more hard-earned income.

        1. MMT-based stimulus is a fact so, that Congress disproportionally bails out the wealthy compared to the non-wealthy indicates that Congress cares more for the former than the latter. This practice fist the dictatorial or the monarchial model of governance. This should not be so in a democratic republic.

        1. Clinton, and before him, Eisenhower had signed balanced budgets.

          Despite pretending to be fiscally conservative, no republicans since Eisenhower have even tried to balance the budget. For political purposes, they have wrapped themselves in the flag and massively expensive military adventurism. So did Johnson and Kennedy, by the way.

          The USA hasn’t lived within its means for generations. That is why Chyyyyyna is poised to eat your lunch. Moreover China will overtake you even faster now that your « United » States have dissolved into two camps of bickering ninnies.

      2. MMT is used to reward or to prop up corporations on Wall St so it should be used to reward or to prop up workers on Main St. by the same proportion. And in the last stimulus — which means Congress’ using MMT creation of money — executives got millions each while individuals got a measly thousand. This is a continuation of disparity and its amplification.

    2. Frankly, if you can read a basic EGG trajectory analysis (+-BUN) with respect to SAMN YTD, you don’t need all that much insider information to understand near term valuations.

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