SoftBank shares slide after Nvidia CEO Huang resigns

SoftBank Group shares fell about 5% in Tokyo on Friday, November 13, as investors weighed what Jensen Huang's resignation as Nvidia chief executive means for the AI industry. The drop came three days after the Japanese investor posted a large quarterly loss. SoftBank fell 5.1% by the close, while memory maker Kioxia dropped about 2.3% and chip equipment maker Tokyo Electron gained 1.7%, the Associated Press reported. The broader Nikkei 225 still rose about 0.5%. TradingKey put SoftBank's drop at 5.11%.tradingkey.com+1

Huang's sudden exit

Nvidia's board announced on November 12 that Huang had resigned as president, CEO and director, effective immediately. Chief Financial Officer Colette Kress will serve as interim CEO, and Harvey C. Jones becomes the company's first-ever board chair. Reuters reported that the move leaves the AI industry "without its biggest champion." Huang, who co-founded the company, holds a stake of about 3.61%. The resignation followed reports of extramarital affairs, including one with a woman U.S. officials suspected of being a Chinese intelligence asset, according to CBS News. Nvidia shares fell more than 4% on Wall Street on Thursday, AP reported.investor.nvidia.com+3

The selloff was uneven across Asia. South Korea's Kospi gave up early gains and closed down about 1%, as foreign investors sold electronics and chip shares. SK Hynix fell about 3%, while Samsung Electronics ended slightly higher, TradingKey reported.tradingkey.com

SoftBank already under pressure

SoftBank was already weak before Huang left. On November 10, it reported a net loss of 1.1 trillion yen (about $7 billion) for the July-September quarter. A year earlier it had a 2.5 trillion yen profit, which came largely from a gain on its stake in OpenAI, Reuters reported. The loss included a $3.7 billion hit from advance payments for equipment at U.S. data center projects whose plans later changed. Financing costs also rose.reuters.com

Analysts say SoftBank's results are hard to predict because its holdings, including OpenAI and Arm Holdings, tend to be volatile, AP noted. A GuruFocus analysis described the company as working "like a leveraged fund on AI sentiment." In that view, a shock to the sector's leader hurts SoftBank more than chip equipment makers that have strong order books.finance.yahoo.com+1

What comes next

Investors are now looking to Nvidia's quarterly report on November 17, which will be Kress's first as interim chief, Capital Times reported. Nvidia's board said the report will go ahead as planned. The board also said it is considering internal and external candidates for the permanent job. Nvidia had no succession plan for Huang, who led the company for more than 30 years, according to AP.apnews.com+1