SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally

Japanese conglomerate has been snapping up options in huge amounts over past month.

SoftBank is the “Nasdaq whale” that has bought billions of dollars’ worth of US equity derivatives in a series of trades that stoked the fevered rally in big tech stocks before a sharp pullback on Thursday and Friday, according to people familiar with the matter. The Japanese conglomerate had been snapping up options in tech stocks during the past month in huge amounts, fuelling the largest ever trading volumes in contracts linked to individual companies, these people said. One banker described it as a “dangerous” bet. The aggressive move into the options market marks a new chapter for the investment powerhouse, which in recent years has made huge bets on privately held technology start-ups through its $100bn Vision Fund. After the coronavirus market tumult hit those bets, the company established an asset management unit for public investments using capital contributed by its founder, Masayoshi Son. 

Higher demand for options usually drives the share prices of the underlying stocks higher, and this has been the case for some of the more famous companies in the sector. Tesla(NASDAQ:TSLA) has been a particularly strong performer, with a 831% rise in the last month alone. Other tech stars have also risen steeply: Amazon (NASDAQ:AMZN) is up by 84%, for example, while Netflix (NASDAQ:AMZN) advanced 78%.