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SoftBank Sells Entire Stake in Troubled Cloud Firm Sinch

(Bloomberg) -- Japanese investor SoftBank Group Corp has sold its entire stake in Sinch AB following a share price collapse of more than 90% in the Swedish cloud-based platform provider.

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The Swedish company has fallen 93% from a peak in September last year following a string of disappointing earnings reports. The stock is also among the most shorted in Europe.

That’s a complete reversal from 2020 when Sinch was lauded as the best performing equity in Europe as virus-related lockdowns fueled demand for its messaging services and investors cheered the company’s aggressive pace of acquisitions.

But even then there were warnings. In June of that year, a financial adviser with Soderberg & Partners said that Sinch’s “growth journey must continue, or there is a great risk that the stock will end up at the other end of the chart.”

Softbank, which acquired a tenth of Sinch in November 2020, is selling its remaining stake of 5% to Sinch’s co-founder and interim Chief Executive Officer Johan Hedberg and Neqst D2 AB, a firm connected to the company’s Chairman Erik Froberg.

Shares rose as much as 24% in Stockholm on Friday, the biggest gain since February last year. The fact that the stake was bought by Sinch’s largest shareholder and the firm’s co-founder could partially offset the potentially negative aspect of the Softbank sale, Morgan Stanley said in a note.

Read More: SoftBank Buys 10.1% Stake in Sinch After Its Meteoric Surge

(Adds share price move)

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