SoftBank

[cyclone]

SoftBank's CEO clinches his biggest deal by letting go

Greg Roumeliotis, Liana B. Baker
APRIL 30, 2018

(Reuters) - SoftBank Group Corp (9984.T) CEO Masayoshi Son has made a name for himself as the ultimate dealmaker, raising almost $100 billion for investments with his Vision Fund. Yet after four years of haggling, he has scored his biggest deal by simply letting go.

The agreement on Sunday to combine SoftBank’s Sprint Corp (S.N) with Deutsche Telekom AG’s (DTEGn.DE) T-Mobile US Inc (TMUS.O) will create a U.S. wireless carrier with a market value of more than $80 billion, matching SoftBank’s market capitalization and making it its biggest holding.

SoftBank, a Japanese technology and telecommunications group, will own just 27 percent of the combined company, however, while Deutsche Telekom will own 42 percent and have voting and board control.

It is a far cry from the terms the companies discussed in their first round of talks in 2014, when Sprint was larger than T-Mobile and SoftBank was negotiating owning a majority stake in the combined company.

More details in https://www.reuters.com/article/us-sprin...SKBN1I1003

[cyclone]

Share Split and Dividend Forecast for Fiscal Year Ending March 2020

SoftBank Group determined to split its ordinary shares at a ratio of two for one and forecasts the annual dividend for the fiscal year ending March 2020 after the Share Split to be JPY 44.00 per share, which is the same amount as the prior year. This effectively doubles the annual dividend amount from the previous fiscal year.

More details in https://links.sgx.com/FileOpen/190509_SB...eID=558531

[cyclone]

SoftBank Group to book 1.2 trillion yen profit on Alibaba share sale

Sam Nussey
Published June 4, 2019

TOKYO (Reuters) - Japan’s SoftBank Group Corp said on Tuesday it expects to book around 1.2 trillion yen ($11.12 billion) in pre-tax profit on the sale of shares in China’s Alibaba Group Holding Ltd.

The sale dates from 2016 when SoftBank sold part of its Alibaba stake via derivatives to fund its acquisition of British chip designer ARM.

The transaction leaves SoftBank with a 26% stake in Alibaba worth $101 billion. The Japanese investment firm said it would book the profit in the financial quarter ending June.

SoftBank Group founder and Chief Executive Masayoshi Son bought into Alibaba for just $20 million in 2000. The Chinese startup’s growth into one of the world’s biggest e-commerce companies has helped burnish Son’s tech investor credentials.

The windfall comes as one of Son’s biggest tech bets, Uber Technologies Inc, has shown lackluster stock market performance since its market debut last month.

SoftBank booked a 418 billion yen gain on its Uber stake in the financial quarter ended March ahead of the debut. On Monday, Uber’s shares closed 9% below their IPO price at $41.

Son has referred to the value of the Alibaba stake to argue that SoftBank Group’s shares are undervalued. Following the end of a 600 billion yen stock-buyback program and Uber’s disappointing listing, the shares have fallen 23% from their April high.

More details in https://www.reuters.com/article/us-softb...SKCN1T50L4

[cyclone]

SoftBank seeks control of WeWork through financing package: source

Joshua Franklin
OCTOBER 14, 2019 / 5:18 AM

(Reuters) - SoftBank Group Corp. (9984.T) has prepared a financing package for WeWork Companies Inc that would give it control over the shared office space company, a person familiar with the matter said.

The package would significantly increase the stake of SoftBank, which already owns around one third of WeWork, and further dilute the influence of co-founder Adam Neumann, said the person, who declined to be identified because of the sensitivity of the matter.

Reuters had reported that SoftBank was in negotiations to make a $1 billion investment to enable WeWork to go through a major restructuring.

Without a fresh infusion of cash, WeWork risks running out of money as early as the end of the December, the person said.

WeWork is working with JPMorgan Chase & Co (JPM.N) to negotiate a $3 billion debt deal after a planned initial public offering was tabled last month because of investor concerns about how it was valued and its business model, Reuters reported last week.

“WeWork has retained a major Wall Street financial institution to arrange a financing,” a WeWork spokeswoman said. “Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”

WeWork lost $1.9 billion in 2018 and burned through $2.36 billion in cash in the first half of this year, according to filings.

In recent weeks, global credit rating agencies Standard & Poor’s and Fitch Ratings have also downgraded WeWork’s credit ratings deeper into junk territory, while the company’s junk bond is trading at a record low.

More details in https://www.reuters.com/article/us-wewor...SKBN1WS0RS

[cyclone]

Snakes and ladders: SoftBank Vision Fund's climbing, sliding valuations

Anirban Sen, Sam Nussey
OCTOBER 18, 2019 / 3:51 PM

(Reuters) - The $100 billion Vision Fund of Japan’s SoftBank Group Corp (9984.T) has in just over two years burned through much of its capital investing in money-losing, late-stage tech startups in areas as varied as autonomous driving, healthcare and finance.

The IPO flop of office-sharing firm WeWork, one of its biggest bets, and plunging valuations of other major investments such as ride-hailing pioneer Uber have cast a cloud over the efforts of SoftBank founder and Chief Executive Masayoshi Son to raise a second giant fund.

With WeWork trying to raise new capital, SoftBank has proposed a further $5 billion investment in the money-losing startup, sources told Reuters this week.

Following are highlights of the investments and performance of SoftBank Vision Fund, whose first major close was in 2017.

MAJOR INVESTMENTS

* $11.8 billion in Chinese ride-hailing firm Didi Chuxing

* $10.7 billion in U.S.-based office sharing startup WeWork parent The We Company (total includes SoftBank Group investment)

* $7.7 billion in U.S. ride-hailing firm Uber Technologies Inc (UBER.N)

* $3 billion in Southeast Asian ride-hailing firm Grab

* $3 billion in South Korean e-commerce firm Coupang

Note: investment figures from company filings, Reuters reports

SIZE OF VISION FUND

* The fund has invested $71.4 billion in 83 firms, recording $20.2 billion in investment gains and distributing $6.4 billion to its investors as at the end of June.

* SoftBank contributed $20.5 billion to the fund. The firm has $25.3 billion in unrealized investment gains, $3.2 billion in undistributed manager performance fees and $1.6 billion in realized proceeds.

PAPER MONEY, BIG BLACK BOX

* The Vision Fund’s $20.2 billion of investment gains are mostly on paper and its valuations are under growing downward pressure as shares in four of the fund’s five listed portfolio firms have fallen sharply in the three months through September.

Those newly listed firms are Uber, Slack Technologies Inc (WORK.N), Guardant Health Inc (GH.O), ZhongAn Online P&C Insurance Co Ltd (6060.HK) and Ping An Healthcare and Technology Co Ltd (Ping An Good Doctor) (1833.HK).

* The two major realized gains are from sales of its investments in Indian e-commerce firm Flipkart and U.S. chipmaker Nvidia Corp (NVDA.O).

Shares in SoftBank Group fell over the same period.

More details in https://www.reuters.com/article/us-softb...SKBN1WX0XY

[cyclone]

SoftBank shares fall as WeWork deal adds to financial strains

Sam Nussey
OCTOBER 23, 2019 / 8:01 AM

TOKYO (Reuters) - Shares of SoftBank Group Corp fell 3% in morning trade on Wednesday as the tech conglomerate agreed to spend more than $10 billion to take over beleaguered office-space sharing startup WeWork, adding to its financial pressures.

The deal, structured to give SoftBank an 80% stake in - but not control of - WeWork, takes its total investment to more than $13 billion, with the money-losing startup now valued at just $8 billion.

SoftBank’s shares have fallen 30% from their July peak as investor scepticism grows over the path to profitability for its cash-burning marquee investments like WeWork and publicly listed Uber Technologies Inc.

The deal adds to the financial strains at the highly leveraged group, which is structured to avoid having to consolidate WeWork on its books or take responsibility for WeWork’s onerous lease obligations.



Although SoftBank has an army of retail investors in yield-strapped Japan willing to buy its junk bonds, it already holds about 5 trillion yen ($46 billion) of net debt on its balance sheet - more than half its 9 trillion yen market capitalization.

The cost of default protection on SoftBank Group has risen, with the 5-year credit default swap jumping 17.7 points in a week to the highest level since January.

The disarray at WeWork, which is scrambling for cash following a flopped IPO attempt, comes as SoftBank founder and CEO Masayoshi Son struggles to raise money for a successor to his $100 billion Vision Fund, sources told Reuters this month.

Son has often spoken of his strategy of betting on ambitious founders, who will use SoftBank’s generous cash injections to push for rapid growth - an approach that come under scrutiny from skeptical investors.

More details in https://www.reuters.com/article/us-wewor...SKBN1X202G

[cyclone]

Floundering tech bets put spotlight on SoftBank results, Son

Sam Nussey
NOVEMBER 5, 2019 / 4:45 PM

TOKYO (Reuters) - SoftBank Group Corp and its founder Masayoshi Son face a day of reckoning on Wednesday when the investment juggernaut is likely to post weak quarterly results, hit by hefty falls in the valuation of some of its biggest tech bets.

SoftBank has come under renewed investor scrutiny after it was forced to bail out one of its best known portfolio companies - the cash-burning, office-sharing firm WeWork - for $10 billion.

That has deepened concern about Son’s strategy of pouring billions of dollars into unproven, money-losing startups at a time it is getting squeezed by a sell-off in most of its listed bets.

Uber Technologies Inc posted on Monday a wide quarterly loss, sending its shares sliding in after-hours trading. SoftBank’s $100 billion Vision Fund has a $7.7 billion investment in the U.S. ride-hailing firm.

SoftBank’s quarterly results come at a crucial time for Son, when he is trying to raise capital for a successor to the Saudi Arabia-backed Vision Fund.

SoftBank is expected to post an operating loss of 48 billion yen ($442 million) for the July-September quarter on Wednesday, according to the average forecast of four analyst estimates compiled by Refinitiv.

That would be its first quarterly loss in 14 years, Refinitiv data shows, and compares with an operating profit of 706 billion yen a year earlier.

SoftBank has delivered multiple quarters of sector-beating gains driven by internal revaluations of tech bets by the Vision Fund, which had its first major close in May 2017.

Analysts estimates vary widely, in part because SoftBank provides little detail on how it accounts for those gains or losses on its books.

A further lack of disclosure over valuations on Wednesday would “risk losing the trust of investors,” said Amir Anvarzadeh, market strategist at Asymmetric Advisors.

Given its falling share price - down around 30% since July - the conglomerate may unveil a share buyback of around 500 billion yen to try and stem the slide, Anvarzadeh said. SoftBank announced a 600 billion yen buyback in February.

UNUSUAL STEP

Investors will be looking closely at how SoftBank accounts for the value of its stake in WeWork, into which it has poured $13 billion to take a majority stake. WeWork was valued by SoftBank as high as $47 billion as recently as January, but is currently valued at just $8 billion.

The Japanese company is expected to announce on Wednesday a writedown of at least $5 billion due to a slump in values of WeWork and some other top holdings, Bloomberg reported late last month.

SoftBank has taken the unusual step of structuring the bailout to avoid having to consolidate WeWork on its books, despite taking an 80% stake, reducing its disclosure requirements as it tries to avoid liability for the startup’s onerous lease obligations.

Dan Baker, analyst at Morningstar, said he is marking the value of WeWork at zero until SoftBank’s restructuring has demonstrated a clear path to profitability.

SoftBank said last week it will post a $2.6 billion gain on the value of its stake in Son’s most acclaimed tech bet, Alibaba Group Holding.

More details in https://www.reuters.com/article/us-softb...SKBN1XF16E

[dreamybear]

Investing - not an easy thing to do

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‘My investment judgment was poor,’ SoftBank’s Son says after Vision Fund’s $8.9 billion loss
Updated 2 hours ago

- Second-quarter operating loss at 704 billion yen.
- That compares with 706 billion operating profit a year earlier.
- Vision Fund recorded unrealized 537.9 billion yen loss for 6 months.
- Vision Fund has invested $70.7 billion in 88 start-ups. Those investments are now worth $77.6 billion.
- SoftBank marked down investments in WeWork and Uber......

https://www.cnbc.com/2019/11/06/softbank...-loss.html

[gzbkel]

The SoftBank Effect: How $100 Billion Left Workers in a Hole
SoftBank poured money into start-ups that use armies of contractors. That has upended the lives of drivers, hotel operators and real estate agents around the world.
... 
https://www.nytimes.com/2019/11/12/techn...rtups.html

[weijian]

The SoftBank Effect: How $100 Billion Left Workers in a Hole
SoftBank poured money into start-ups that use armies of contractors. That has upended the lives of drivers, hotel operators and real estate agents around the world.
... 
https://www.nytimes.com/2019/11/12/techn...rtups.html

Come to think of it. How much of the prosperity and growth of the economy is attributed to partly the boom from VC money (especially Softbank). To what extent has Softbank (or the Arabs) been financing our growth in the last few years and how will the growth be again when it stops?