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.
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. 🙂