SoftBank Group Corp.’s shares plunged Tuesday as investors questioned the $32 billion price tag on the company’s purchase of U.K.-based chip designer ARM Holdings PLC.

TOKYO—SoftBank Group Corp.’s shares plunged Tuesday, wiping out $7 billion off its market capitalization as investors questioned the $32 billion price tag on the company’s purchase of U.K.-based chip designer ARM Holdings PLC.

Shares in the Japanese internet and telecommunications conglomerate closed down 10.3% at 5,387 yen ($50.6) in Tokyo trading, after the price briefly touched ¥5,329—the lowest level since early April.

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