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SoftBank's belly flop will long reverberate in Japan's markets

Overpriced float undermines trust and efforts to re-engage retail investors

| Japan
Belly flop -- SoftBank's diving debut (Source photo: Denver Post/Getty Images)

The diving debut of Masayoshi Son's big initial public offering is more than an embarrassment for a boastful billionaire. It is a bit of an indictment of the Tokyo financial market and, especially, of some bankers' readiness to promote overpriced stock to investors, including retail savers.

SoftBank's 15% fall on Dec. 19, the first day of trading, was no aberration. Collectively, the aftermarket loss of Japanese companies holding initial public offerings this year is about 10%, says Dealogic.

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