SoftBank

[CY09]

My opinion is that if not for the VC money (funded by cheap money), massive inflation would have occurred.

Because of VC's banking, we have been enjoying cheaper products such as Grab, Spotify, ecommerce, cheap airline fees and the shale oil revolution. Most of these companies are burning cash and making losses. They have been financed by large swath of equity money. Examples such as The purchase of CapitaLand vouchers at 10% discount that is financed by e commerce, Grab offers you discount to paying your taxes, airline like scoots burn through millions in losses each year etc

In my view, once the easy money sauce stops, be prepared for massive inflation. A contrarian view that a loose monetary policy will stoke inflation.

[gzbkel]

The Softbank-WeWork End Game: Savior Economics or Sunk Cost Problem?
Aswath Damodaran
https://aswathdamodaran.blogspot.com/201...avior.html

Since my pre-IPO post on WeWork, where I valued the company ahead of its then imminent offering, much has happened. The company’s IPO collapsed under the weight of its own pricing contradictions, and after a near-death experience, Softbank emerged as the savior, investing an additional $ 8 billion in the company, and taking a much larger stake in its equity. As the WeWork story continues to unfold, I am finding myself more interested in Softbank than in WeWork, largely because it’s actions cut to the heart of so many questions in investing, from how sunk costs can affect investing decisions, to the feedback effects from mark-to-market accounting, and finally on the larger question of whether smart money is really smart or just lucky.
[...]

[cyclone]

SoftBank's Son sticks with gut-led investing in chat with Alibaba's Ma

Sam Nussey
DECEMBER 6, 2019 / 1:25 PM

TOKYO (Reuters) - Weeks after his billion-dollar bailout of WeWork, SoftBank Group Corp’s founder and CEO Masayoshi Son reiterated his belief in an instinct-led investing style, in a discussion with Alibaba Group Holding Inc’s co-founder Jack Ma.

SoftBank owns 26% of China’s Alibaba, with its origin in a $20 million investment in 2000, and the stake is now worth more than the Japanese firm’s market capitalization.

Son on Friday said the decision to invest in Alibaba was driven by a gut feeling.

Other entrepreneurs Son met at that time “did not have true belief in their heart. I can feel,” Son said. “We are the same animal. We are both a little crazy,” he said of long-time ally Ma.

Ma said Son initially tried to invest $50 million in the e-commerce firm, but that he declined saying it was too large a sum - part of a pattern of offering big cheques to company founders that continued with WeWork co-founder Adam Neumann.

Son’s comments come weeks after he was forced to bail out office-sharing startup WeWork when Neumann’s level of control over his firm and hard-partying ways chilled investor appetite and crashed plans for an initial public offering (IPO).

Son last month said he misjudged Neumann’s character, after WeWork - formally The We Company - and other sputtering bets saw his $100 billion Vision Fund report an $8.9 billion second-quarter operating loss.

The conversation at Tokyo University between two of Asia’s most prominent tech entrepreneurs comes at a point of divergence in their careers, with 55-year-old Ma retiring as Alibaba’s executive chairman in September and Son pledging to spend his sixth decade at the helm of his investment juggernaut.

Domestically, SoftBank hopes to drive commercialization of the emerging field of artificial intelligence (AI), announcing on Friday it will spend 20 billion yen ($184 million) over 10 years funding an AI research institute with Tokyo University.

Son “probably has the biggest guts in the world on doing investment,” Ma told attendees to the conference.

“Too much guts, sometimes I lose a lot of money,” Son responded.

With the highly leveraged SoftBank trying to raise funds for a second mega fund in which it is currently the only investor, its stake in Alibaba is one possible source of funds.

More details in https://www.reuters.com/article/us-softb...SKBN1YA0HB

[dreamybear]

Hmmm, is the force strong with this one ?

Trading at less than sum-of-parts(not taking tax into a/c), but I think valuation may be difficult and tech companies are prone to mkt whims and fancies.

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Wanted: Bold activist to take on SoftBank
Wed, Dec 11, 2019 - 5:50 AM

MASAYOSHI Son's SoftBank Group is worth significantly less than the sum of its parts. For an activist investor with plenty of cash and the stomach for a fight, it could be the trade of a lifetime.

Mr Son's US$82 billion tech-to-telecom conglomerate ticks the boxes for pushy shareholders like Dan Loeb's Third Point Management or Paul Singer's Elliott Management. There's poor governance - Mr Son is both chief executive and chairman and makes investments in cash-burning companies like WeWork partly based on his ability to "feel the force"........

https://www.businesstimes.com.sg/garage/...n-softbank

[dreamybear]

More issues for Son ....

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'Toxic' culture and troubling incidents at Oyo
Mon, Jan 06, 2020 - 5:50 AM

.....Oyo offers rooms from unavailable hotels, such as those that have left its service...

Thousands of the rooms are from unlicensed hotels and guesthouses, its executives have acknowledged....

Oyo has also imposed extra fees on hotels and declined to pay the hotels the full amounts they claimed they were owed, according to interviews with hotel owners and employees, emails, legal complaints and other documents viewed by the paper. Some hotel operators have sought to file criminal complaints against Oyo, which said it withheld payments primarily over the hotels' customer service issues....

It would also be another black eye for SoftBank, which is Oyo's biggest investor and owns half the startup's stock. Masayoshi Son, SoftBank's chief executive, has hailed Oyo as a jewel of his company's US$100 billion Vision Fund, even as he recently wrote off billions of dollars on other investments like WeWork......

In December 2019, SoftBank and Mr Agarwal put another US$1.5 billion into Oyo to accelerate its expansion. The funding, negotiated over the summer, valued the company at US$8 billion. At the same time, two other big investors, Sequoia Capital and Lightspeed Venture Partners, reduced their holdings.....

https://www.businesstimes.com.sg/real-es...nts-at-oyo

[cyclone]

Japan telecom SoftBank Corp CEO sees Elliott investment as 'positive'

Reporting by Sam Nussey; Editing by Christopher Cushing
FEBRUARY 7, 2020 / 1:21 PM

TOKYO (Reuters) - Japanese telecom SoftBank Corp’s CEO Ken Miyauchi on Friday welcomed hedge fund Elliott Management’s investment in parent SoftBank Group Corp saying the activist investor’s assessment of the stock as undervalued was “positive”.

Elliott has built up a roughly 3% stake in the tech conglomerate and is pushing for changes to boost its value including strengthening corporate governance and share buybacks, sources said.

Elliott “thinks the company valuation is too low so in that sense it is currently a positive for SoftBank Group,” Miyauchi said, adding he believed corporate governance at the telco he heads was already strong.

SoftBank Group’s shares, which company executives think are chronically undervalued, closed up 7% on Friday after reports of the Elliott investment.

The comments came as SoftBank Corp reported a 15% rise in third-quarter operating profit, beating estimates, underpinned by its mobile business.

The company also raised its full-year operating profit forecast to 900 billion yen ($8.19 billion) from 890 billion yen previously.

Operating profit in the October-December quarter was 243 billion yen versus 211 billion yen a year earlier. That compared with an average forecast of 240 billion yen from three analyst estimates compiled by Refinitiv.

Japan’s third-largest telco, SoftBank Corp has pledged to pay out 85% of its net income as dividends, providing a steady stream of cash to parent SoftBank Group, which holds a 67% stake.

Miyauchi said dividends, rather than share buybacks, are the priority.

Along with a 26% stake in China’s Alibaba, the wireless carrier continues to help to support the market value of its parent, which in the quarter ended September reported its first quarterly loss in 14 years as its tech bets faltered.

Founder Masayoshi Son built his fortune by breaking into Japan’s telecoms market but his reputation could be determined by the performance of the $100 billion Vision Fund, which will report at the group’s results on Wednesday.

SoftBank Corp rivals NTT Docomo and KDDI Corp reported last week that operating profit fell 15% and rose 11%, respectively.

SoftBank’s stable earnings contrast with the fortunes of one of Son’s big early overseas bets, U.S wireless unit Sprint Corp, which last week reported falling subscriber numbers.

Analysts said prospects for the money-losing telco are grim if it does not reach a merger with larger rival T-Mobile US Inc.

More details in https://www.reuters.com/article/us-softb...SKBN2010LU

[cyclone]

SoftBank shares close down 17% in biggest one-day fall

Sam Nussey
MARCH 19, 2020 / 1:30 PM

TOKYO (Reuters) - Shares of SoftBank Group Corp (9984.T) closed down 17% on Thursday in their biggest one-day fall, hammered by investor scepticism over the outlook for tech bets, such as office sharing firm WeWork and ridehailer Uber (UBER.N).

As economic gloom grows over a coronavirus outbreak, SoftBank racked up the second biggest fall in the benchmark index .N225, breaking the 3,000-yen level to close at 2,687 yen.

The one-day fall is greater than during the bursting of the dot-com bubble, which evaporated most of Chief Executive Officer Masayoshi Son’s wealth, as his plans to build a tech investing empire via the $100 billion Vision Fund stutter.

Uber’s shares closed down 22% overnight as people around the world stay home to try and slow the spread of the virus.

SoftBank is considering pulling out of a $3 billion tender offer for WeWork, sources said. The startup has taken long property leases but is exposed to customers pulling out of short co-working contracts as the economy deteriorates.

More details in https://www.reuters.com/article/us-softb...SKBN2160R4

[weijian]

A virus that spreads among humans is the anti thesis of the sharing economy

SoftBank's big bet on sharing economy backfires with coronavirus

[TOKYO] Masayoshi Son has been among the most fervent believers in the sharing economy, investing billions in startups that help people split the use of cars, rooms and offices. But as the coronavirus curtails unnecessary human interaction, it's hammering such businesses and rattling the foundations of Mr Son's SoftBank Group.

https://www.businesstimes.com.sg/garage/...oronavirus

[cyclone]

SoftBank Vision Fund posts record $27 billion loss as tech stocks plummet
* SoftBank’s Vision Fund posted a 3.5 trillion yen loss ($27.4 billion), the biggest loss since the investment fund began in 2017.
* Global markets have been in turmoil as investors contest with rampant inflation and the U.S. Federal Reserve raising interest rates that have caused investors to flee high growth tech stocks.
* SoftBank Founder Masayoshi Son said the company would be more “conservative when it comes to the pace of new investments” as it goes into a “defense” position.

Arjun Kharpal
PUBLISHED THU, MAY 12 20226:46 AM EDT

SoftBank on Thursday reported a record loss at its Vision Fund investment unit, as technology stocks have been hammered by rising interest rates and Beijing’s regulatory crackdown has hurt its China holdings.

The Japanese giant’s Vision Fund posted a 3.5 trillion yen loss ($27.4 billion) for its financial year ended Mar. 31, the biggest loss since the investment fund began in 2017.

Vision Fund’s woes contributed to a record 1.7 trillion yen annual loss for the entire SoftBank group. Its shares closed 8% lower in Japan Thursday.

SoftBank’s Vision Fund invests in high growth stocks and is the brain child of founder Masayoshi Son as a way to reposition the company into an investment firm.

But global markets have been in turmoil as investors contest with rampant inflation and the U.S. Federal Reserve raising interest rates that have caused investors to flee high growth tech stocks.

The ongoing Russian war on Ukraine and a resurgence of Covid-19 in China and the subsequent lockdown of the financial mega-city Shanghai, has fueled concerns over global growth and added extra pressure on markets.

Son said during an earnings presentation Thursday that these factors have caused “confusion in the world” and in the markets, according to an official translation.

South Korean e-commerce firm Coupang, which went public last year in the U.S. and is down nearly 60% this year, was one of the companies that contributed to the Vision Fund’s loss. Singaporean ride-hailing giant Grab and U.S. delivery firm Doordash were among the other woeful performers in the portfolio.

More details in https://www.cnbc.com/2022/05/12/softbank...-dive.html

[weijian]

From behavioral perspective, I feel that Masayoshi Son is just trying to re live his "greatest investment of all time" in Alibaba and Yahoo Japan. But if it is the "greatest of all time", then maybe it just happens one time in one's life time.

Softbank: Twilight of an Empire

But Son has never played it safe. “Masa always takes big swings,” one source said. “He’s a slugger all the time. He’s never a base hitter.” It also doesn’t seem as all-or-nothing as Son’s comments suggest. Given Softbank’s cash position – and potential to raise more – there seems to be latitude to keep writing big checks without jeopardizing the mothership. Impressive companies with great potential are on-discount at the moment; Softbank shouldn’t miss the chance it's been presented.

https://www.readthegeneralist.com/briefing/softbank