By David Meyer
October 15, 2018

The furor over the missing—and allegedly murdered—journalist Jamal Khashoggi is obviously bad news for the Saudis, who have seen potential business partners press pause on their plans. But it’s also bad news for SoftBank (sftby), the Japanese conglomerate that has close ties with Saudi Arabia.

SoftBank’s share price dropped more than 7% Monday, and analysts are in part blaming the Khashoggi outcry.

SoftBank is currently one of the world’s most prolific investors, through its “Vision Fund”—a $100 billion war chest that was established a couple years back with a $45 billion infusion from Saudi Arabia’s sovereign wealth fund. Recipients of Vision Fund investments have included ride-hailing outfits such as Uber and Didi Chuxing, GM’s Cruise self-driving car subsidiary, chipmakers ARM and Nvidia, and the office-space firm WeWork.

For Saudi Crown Prince Mohammed bin Salman, the Vision Fund backing was a way to diversify the kingdom’s oil-centric economy. And it’s a move he plans to repeat: earlier this month, it was reported that the Saudis were prepared to put another $45 billion into a second Vision Fund, using cash from the planned stock market flotation of state oil firm Saudi Aramco and the sale of a stake in the Saudi manufacturing giant SABIC (sabic).

However, since then the Khashoggi affair blew up. The journalist, who had been critical of Prince Mohammed, was last seen walking into the Saudi consulate in Istanbul on October 2. According to Turkey, he was then tortured, killed and dismembered. The Saudis deny this, but have provided no evidence to back their claim that he left the consulate alive.

With figures such as Richard Branson backing away from new business deals, and a host of sponsors and participants pulling out of Prince Mohammed’s Future Investment Initiative conference, it seems likely that Khashoggi’s disappearance and possible death will bring repercussions. But it’s not clear what those will entail, particularly if countries change their relationships with Saudi Arabia.

On Monday, analysts said the drop in SoftBank’s share price seemed to be down to the Khashoggi incident and a general pullback on tech shares.

Morningstar analyst Dan Baker pointed out to CNBC that SoftBank’s other big bet, Alibaba (baba), was doing fine, so it was likely “the Saudi ties” that were weighing on the Japanese conglomerate’s stock price.

“We are seeing a massive backlash right now on tech companies and investors who are receiving funding from the Saudi Arabian government,” Constellation Research’s Ray Wang told CNBC. Meanwhile, Myojo Asset Management CEO Makoto Kikuchi told Reuters that the sell-off was “more psychological than anything related to worries on [SoftBank’s] fundamentals.”

Although U.S. President Donald Trump is keen to maintain arm sales to Saudi Arabia, which is at war with rebels in Yemen, he has warned that the kingdom will face “severe punishment” should it be proved to be behind Khashoggi’s disappearance. Saudi media has warned that sanctions would create “an economic disaster that would rock the entire world.”

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