SFTBY - SoftBank Group Corp.

Other OTC - Other OTC Delayed Price. Currency in USD
23.94
-1.21 (-4.81%)
As of 1:10PM EST. Market open.
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Previous Close25.15
Open23.90
Bid0.00 x 0
Ask0.00 x 0
Day's Range23.73 - 24.23
52 Week Range18.31 - 28.04
Volume2,142,287
Avg. Volume1,112,793
Market Cap99.707B
Beta (5Y Monthly)1.63
PE Ratio (TTM)3.35
EPS (TTM)7.15
Earnings DateN/A
Forward Dividend & Yield0.20 (0.81%)
Ex-Dividend DateSep. 25, 2019
1y Target EstN/A
  • SoftBank profit all but wiped out by Vision Fund losses
    Reuters Videos

    SoftBank profit all but wiped out by Vision Fund losses

    SoftBank Group says its quarterly profits were all but wiped out. The Japanese investment giant eked out earnings of just 24 million dollars in the third quarter. That's a fraction of the same period a year ago. Profits were erased by a loss of just over two billion dollars at its flagship Vision Fund, which invests in tech firms. Wednesday's (February 12) results cast a deeper shadow over founder Masayoshi Son. Investors were already questioning whether to put money into his next venture, Vision Fund 2. It had previously attracted pledges of over 100 billion dollars. But Son's reputation had already taken a hit over the WeWork debacle. The U.S. office sharing company - a big SoftBank bet - had to be bailed out after a failed IPO. Now Son says the firm has turned the corner, pointing to a rally in prices of some of investments. But he also admitted scaling back Vision Fund 2, which right now hasn't attracted any outside investment.

  • T-Mobile, Sprint Revise Deal Terms After Regulatory Approval
    Bloomberg

    T-Mobile, Sprint Revise Deal Terms After Regulatory Approval

    (Bloomberg) -- T-Mobile US Inc. and Sprint Corp. agreed to new terms for their pending merger that take account of the slide in Sprint shares since the transaction was first agreed, putting the industry-altering deal a step closer to completion.T-Mobile owners will get roughly 11 shares of Sprint for each of their stock, the companies said Thursday. That’s an increase from a ratio of 9.75 previously and is more favorable for T-Mobile’s German owner Deutsche Telekom AG.The equity value of the amended deal is about $37 billion compared with the original agreement of $26.5 billion, according to Bloomberg Intelligence analyst Erhan Gurses. The higher valuation partly reflects the 62% gain in T-Mobile shares since the all-stock transaction was announced almost two years ago, despite the deterioration in Sprint’s business.Getting one of the biggest U.S. wireless mergers ever over the finish line would be a boon for Deutsche Telekom as it will reduce its reliance on Europe, where carriers are struggling to grow amid fierce competition. T-Mobile makes up more than half of Deutsche Telekom’s sales, up from about a third in 2014. A completed deal will also benefit Sprint owner SoftBank Group Corp. by allowing its chairman, Masayoshi Son, to better focus on his technology investments and the $100 billion Vision Fund.The combined company, which will operate under the T-Mobile name, will have a regular monthly subscriber base of about 80 million -- in the same league as AT&T Inc., which has 75 million subscribers, and Verizon Communications Inc., which has 114 million.When the transaction closes, which could happen as soon as April 1, Deutsche Telekom is expected to keep 43% of the merged entity, while SoftBank has 24%. The rest will be held by public shareholders.Deutsche Telekom shares fell 1.3% to trade at 16.41 euros in Frankfurt. Sprint shares were up 5% to $9.96 at 11:01 a.m. in New York, while T-Mobile was down 1.8% to $97.73.The original accord, which united the third- and fourth-largest U.S. wireless carriers, was forged in April 2018. That pact lapsed on Nov. 1, and the companies didn’t initially renew the terms while they fought for government approval. When a federal judge rejected a state lawsuit to block the transaction earlier this month, that put the talks on the front burner.Along the way, Sprint’s condition has worsened. That added pressure to redraw the agreement so that it was more favorable to Deutsche Telekom.SoftBank agreed to surrender 48.8 million T-Mobile shares that it will acquire in the merger to the combined company immediately after the transaction closes. But those shares could be reissued to SoftBank by 2025 if the new company’s stock stays above $150 for a period of time.That arrangement -- having SoftBank relinquish the stock after the deal closes -- was structured so that the deal wouldn’t have to go before another shareholder vote.Sprint investors other than SoftBank will still get the original ratio of 0.10256 T-Mobile shares for each Sprint share -- the equivalent of about 9.75 Sprint shares for each T-Mobile share.Sprint’s monthly churn -- a closely watched measure of how many customers leave -- has risen to nearly 2%. That means roughly a quarter of its subscriber base is quitting the carrier each year. And the company isn’t making up for the decline by charging more: Average revenue per customer has fallen 5% since the deal was announced.Analysts such as LightShed Partners’ Walt Piecyk said the merger’s exchange ratio should be closer to 12, given Sprint’s deteriorated business.(Updates with valuation detail in third paragraph, updates share prices.)To contact the reporters on this story: Scott Moritz in New York at smoritz6@bloomberg.net;Stefan Nicola in Berlin at snicola2@bloomberg.netTo contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Jennifer RyanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Global telcos join Alphabet, SoftBank's flying cellphone antenna lobbying effort
    Reuters

    Global telcos join Alphabet, SoftBank's flying cellphone antenna lobbying effort

    Alphabet and SoftBank's attempts to launch flying cellphone antennas high into the atmosphere have received backing from global telcos, energizing lobbying efforts aimed at driving regulatory approval for the emerging technology. Loon, which was spun out of Google parent Alphabet Inc's business incubator, and HAPSMobile, a unit of SoftBank Group Corp's domestic telco, plan to deliver high speed internet to remote areas by flying network equipment at high altitudes. Lobbying efforts by the two firms, which formed an alliance last year, are being joined by companies including aerospace firm Airbus , network vendors Nokia and Ericsson and telcos China Telecom , Deutsche Telekom , Telefonica and Bharti Airtel .

  • SoftBank’s Son to Pitch U.S. Investors Under Cloud of WeWork
    Bloomberg

    SoftBank’s Son to Pitch U.S. Investors Under Cloud of WeWork

    (Bloomberg) -- Masayoshi Son will head to New York next month for the first time since the implosion of WeWork, seeking to persuade hedge funds and institutional investors that the fortunes of SoftBank Group Corp. have turned since the disastrous investment.The Japanese billionaire is scheduled to address investors on March 2. There, he could point to the approved sale of Sprint Corp., a rally in Uber Technologies Inc. shares and Elliott Management Corp.’s purchase of SoftBank stock as signs of progress at his company, said people familiar with the plans. It’s unclear where WeWork will fit into the agenda.Within SoftBank, there’s disagreement about how to convey the company’s strategy. Son, 62, is known for his eccentric financial presentations, which have included a “hypothetical illustration” of WeWork profitability and stock photos of ocean waves and calm waters. One memorable slide from 2014 contained only a drawing of a goose and the words: “SoftBank = Goose.” Many staff at headquarters in Tokyo love the founder’s showmanship, but some senior executives are exasperated and argue a clearer and more sober message is needed, said people familiar with internal discussions who asked not to be identified because the matter is private.Ultimately, Son will decide. He has downplayed any pressure from Elliott, a New York-based activist investor that disclosed a nearly $3 billion stake in SoftBank this month. Son called Elliott an “important partner” and said he’s in broad agreement with the investor’s arguments for buybacks and increasing the stock price. Son has signaled less receptiveness to Elliott’s other suggestions: selling more of the stake in Alibaba Group Holding Ltd. and reining in the Vision Fund, a $100 billion investment vehicle that accounted for more than $10 billion of losses in the past two quarters.In private meetings with SoftBank, Elliott raised issues over the clarity of SoftBank’s strategy, people familiar with the talks said. SoftBank is planning to make hires within its investor relations department to help shape the message to shareholders. SoftBank declined to comment. A spokesperson for Elliott declined to comment.“Right now, serious heat is being applied on Son,” said Justin Tang, head of Asian research at United First Partners in Singapore. “Son has to be seen actually doing something.”Son’s heading into the meeting with one win under his belt: T-Mobile US Inc. and Sprint have agreed to new terms for their pending merger, a key step toward completing a transaction that will unload the loss-making carrier and unlock new capital for SoftBank. Its shares rose as much as 3.3% in Tokyo Friday.T-Mobile, Sprint Renew Deal as Merger Clears Regulatory HurdlesAlthough next month’s event was scheduled before Elliott disclosed its stake and is not designed to specifically address the activist investor’s involvement, it will be a focus for attendees, said people familiar with the preparations. Executives are bracing for questions about Elliott’s intentions and how far the shareholder will go to boost the stock’s value.Goldman Sachs Group Inc. is organizing the March event, the people said. The firm, which helped Japan’s Sony Corp. and Toshiba Corp. in their dealings with activist investors, is vying for the job of advising SoftBank on Elliott, said a different person said. However, SoftBank is likely to manage the relationship in-house, another person said. The job may fall to Marcelo Claure, the chief operating officer who’s helping oversee the WeWork debacle; Katsunori Sago, the chief strategy officer and a former Goldman Sachs executive; or Ron Fisher, a director and trusted adviser to Son. A Goldman representative declined to comment on SoftBank.Dogs and PizzaSoftBank is recovering from a series of stumbles in recent months. WeWork’s plan to go public last year imploded, forcing SoftBank to arrange a rescue financing of $9.5 billion in October. Uber, despite a two-month surge, is still trading about 10% below last year’s offering price. The Vision Fund has suffered other high-profile setbacks, including investments in failed online retailer Brandless Inc., dog-walking app Wag Labs Inc. and pizza robot company Zume Pizza Inc.Elliott has said it took the stake in SoftBank because the Japanese company’s shares are woefully undervalued compared with its assets. Son himself has been pleading the case with increasing frequency. SoftBank’s own sum-of-parts calculation puts its total value at 12,300 yen a share ($111). That’s more than double SoftBank’s actual share price, which values the company at about $104 billion. Elliott has pegged SoftBank’s net asset value at about $230 billion, people familiar with the discussions have said.The disconnect between what SoftBank and Elliott say the company is worth and the market value can be explained by several quirks of how the business is run, according to a report from Pierre Ferragu, an analyst at New Street Research. Many shareholders would like the company to return more capital and improve its governance, he wrote. Risks associated with the Vision Fund and a lack of details about tax liabilities associated with cashing out its investments are other factors.SoftBank recognized the need for more oversight as early as 2018, when it charged Claure with a broad review of operations across SoftBank companies. Claure, the former head of Sprint, spent months assembling a team of about 40 executives. In the end, he was forced to cede control of the so-called SoftBank Operating Group to the man it was supposed to be overseeing: Rajeev Misra, the head of the Vision Fund.Elliott wants SoftBank to set up a special committee to review investment processes at the Vision Fund. Elliott argues the fund has dragged down the share price despite making up a small portion of assets under management, said people familiar with the discussions.Some at SoftBank are resistant to the idea of an oversight committee. Instead, SoftBank is seeking to resolve issues at the Vision Fund with new governance standards for the companies it invests in. The new rules will encompass how the fund approaches the composition of the board of directors, founder and management rights, rights of shareholders, and mitigation of potential conflicts of interest.Son has conceded that missteps with the original fund is making it difficult to raise money for a successor. He said last week that SoftBank may need to invest in startups using solely its own capital for a year or two.‘Black Swan’Elliott is also calling for a buyback of as much as $20 billion. A repurchase of that scale could boost SoftBank’s shares by 40%, Ferragu estimated. SoftBank’s last share repurchase was announced about a year ago, a record 600 billion yen. It sparked a rally that pushed the stock to its highest price in about two decades.Selling Alibaba shares to pay for a buyback, as Elliott has proposed, could be a point of contention with Son. In the past, Son has used the shares as collateral to borrow money for big acquisitions, including the $32 billion purchase of chip designer ARM Holdings. Son said last week during a quarterly financial briefing that he’d prefer to sell as little as possible and that there’s “no rush” to do so.SoftBank said on Wednesday it plans to borrow as much as $4.5 billion against shares of its Japanese telecom unit. The company, which had 3.8 trillion yen of cash and equivalents at the end of December, said it was raising capital for operations. SoftBank’s debt load exceeds $120 billion.Son’s reliance on debt is raising alarms, said Tang, the financial analyst. “He’s going to get wiped out if there is some black swan event,” Tang said. “SoftBank needs to de-leverage, and the best way to do it is to sell the Alibaba stake.”Elliott has a tradition of using strong-arm tactics to get its way with target companies, but there’s little chance of that happening with SoftBank. Elliott’s stake enables it to call an emergency shareholder meeting, but pushing through a proposal without the founder’s backing is a long shot. Son, who often goes by the nickname Masa, controls more than a quarter of SoftBank stock through various vehicles, and the company bylaws require two-thirds of votes to pass any proposal made through the board, according to a person with knowledge of the rules.“Unless everyone is against him,” said Tang, “it’s not possible to dislodge Masa.”(Updates with share action in the seventh paragraph)\--With assistance from Scott Deveau.To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Giles Turner in London at gturner35@bloomberg.net;Takahiko Hyuga in Tokyo at thyuga@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Mark Milian, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SoftBank Climbs on Plan to Borrow $4.5 Billion Via Telecom Stock
    Bloomberg

    SoftBank Climbs on Plan to Borrow $4.5 Billion Via Telecom Stock

    (Bloomberg) -- SoftBank Group Corp.’s stock climbed after it unveiled plans to borrow as much as 500 billion yen ($4.5 billion) by putting up shares of its Japanese telecom unit as collateral, raising capital for the investment giant’s operations.The money for the two-year loan, which will have a one-year extension option, will come from 16 financial institutions, SoftBank said in a statement. It pledged as much as 953 million shares of SoftBank Corp. and said the money will be used to fund operations. SoftBank Group’s stock rose as much as 3.6% in Tokyo, while the unit’s was little changed.Activist investor Paul Singer this month revealed his firm had acquired a stake of as much as $3 billion in SoftBank and has advocated for a share buyback of as much as $20 billion, along with governance changes and more transparency about its investments. SoftBank founder Masayoshi Son called Singer’s Elliott Management Corp. an “important partner” and said he is in broad agreement with the investor about SoftBank buybacks and share value.SoftBank will need to raise cash to meet those demands. Son is adopting a more conciliatory stance just as he’s struggling with the $100 billion Vision Fund, which made him the biggest investor in technology. The fund lost money in the three months ended in December, one quarter after the meltdown at WeWork triggered a record loss for the Japanese company. Son is trying to raise capital for a second fund, but last week said he is no longer targeting $108 billion and SoftBank may finance the effort on its own.“We sense that the stars are now aligned for the firm to conduct a buyback,” Citigroup Global Markets analyst Mitsunobu Tsuruo wrote. SoftBank “will be in a position to flexibly implement a buyback amounting to” about 5% of its market capitalization.Read more: SoftBank’s Son Considers a ‘Bridge’ Fund Before Vision Fund 2The past 12 months have been tumultuous for Son and SoftBank. A year ago, the company unveiled a record buyback, sparking a rally that pushed shares to the highest since its dot-com peak in 2000. Uber Technologies Inc.’s disappointing public debut and the implosion of WeWork wiped out the gains over the next few months. But SoftBank surged again this month after Singer disclosed his stake and Son won approval to sell his Sprint Corp. to T-Mobile US Inc.SoftBank has 13.75 trillion yen of interest-bearing debt, with more than 2.6 trillion yen of bonds coming due in the next three years. The company also had 3.8 trillion yen of cash and equivalents as of the end of December.To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Fortress Said to Increase Offer to Purchase Mt. Gox Claims
    Bloomberg

    Fortress Said to Increase Offer to Purchase Mt. Gox Claims

    (Bloomberg) -- Fortress Investment Group LLC increased its offer to purchase creditor claims from the defunct Mt. Gox cryptocurrency exchange in the wake of this year’s Bitcoin rally.The private-equity and hedge-fund firm sent letters this week to creditors offering $1,300 per Bitcoin, or 88% of its estimated account value, according to the one-page proposal, which Bloomberg News obtained from a person who said they weren’t authorized to speak on the matter. In December, the firm offered $755, and when Bitcoin traded lower, it dropped the price to as little as $600 per Bitcoin last March.Based in Japan, Mt. Gox was once the world’s biggest Bitcoin exchange, until it closed in early 2014 after losing the coins of thousands of customers. Thousands of Bitcoins have since been found, and a trustee is working to reimburse creditors. The reimbursement is being delayed by lawsuits.Michael Hourigan, a managing director at Fortress, said in the letter that firm is making the discount offer “due to the likely timeline (3 to 5 years) and financial risk of the ongoing litigations” involved in getting money from Mt. Gox.Bitcoin has rallied about 40% since the beginning of the year to cross $10,000.To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Rita NazarethFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SoftBank to borrow $4.5 billion pledging domestic telco's shares
    Reuters

    SoftBank to borrow $4.5 billion pledging domestic telco's shares

    SoftBank Group Corp said on Wednesday it plans to borrow up to 500 billion yen ($4.5 billion) from 16 domestic and foreign financial institutions using almost a third of its stake in telco SoftBank Corp as collateral. The loan, which a company spokeswoman said will be used to boost the group's cash on hand and for general business purposes, comes as SoftBank's finances are under pressure on multiple fronts. SoftBank is offering a 20% stake in the telco as collateral for the two-year loan with an option to extend for a further year.

  • SoftBank-backed South Korean ride-hailer Tada gets rare win amid crackdown
    Reuters

    SoftBank-backed South Korean ride-hailer Tada gets rare win amid crackdown

    South Korea's ride-hailing service Tada, a smash hit since its launch just over a year ago, was cleared of transport law violations in court on Wednesday, a rare victory in a market that has been particularly unkind to ride-hailing companies. Since starting up in late 2018, Tada has won 1.7 million users as it capitalised on growing demand and the funding muscle of its Japanese backer SoftBank Group Corp . South Korea restricts ride-hailing to only licensed taxis and bans the use of private cars for the purpose.

  • SoftBank spends $2.5 billion to get second Vision Fund off the ground - sources
    Reuters

    SoftBank spends $2.5 billion to get second Vision Fund off the ground - sources

    The Japanese technology conglomerate is also considering investing another $2.5 billion of its own money, one of the people said. SoftBank Chief Executive Masayoshi Son said last week the company may spend up to two years investing its own money in a bridge fund, to build a portfolio that will give investors enough confidence to participate in a second Vision Fund. To that end, he said SoftBank has already invested "billions" of U.S. dollars, but he did not provide an exact figure.

  • SoftBank's Latest Fund Wheeze Sets Off New Alarms
    Bloomberg

    SoftBank's Latest Fund Wheeze Sets Off New Alarms

    (Bloomberg Opinion) -- SoftBank Group Corp. became vulnerable to activist attack by Elliott Management Corp. because of the harmful noise generated by the Japanese technology investor’s giant Vision Fund. That noise just won’t die down.Sunday brought a report in the Financial Times that Vision Fund head Rajeev Misra is looking to raise a multi-billion dollar fund to buy listed stocks. The blueprint was established last year with SoftBank’s investment in controversial German payments company Wirecard AG via a convertible bond. The new plan looks like a bid to do more unconventional equity investments in the same vein.The development marks a strategic departure. After all, the $100 billion Vision Fund was established to take stakes in private, tech-focused startups. SoftBank has already had to deny that there’s a “misalignment” between Misra and the group’s founder and Chief Executive Officer Masayoshi Son over the idea of investing more in public companies. But it’s not hard to see why Son, and other SoftBank shareholders, might need persuading.Setting up a listed-equity vehicle would bring in new revenues from management and performance fees. It could also create capital gains (or losses) from any investments in the fund that are made using SoftBank’s own capital. Whether it would make such commitments — and the decision-making around any such moves — is unclear. The FT said funding of about $4 billion is being lined up from sovereign funds in Abu Dhabi and Kazakhstan.There is some logic to Misra’s idea. It would, theoretically, marry SoftBank’s nous in emerging technology with the experience in trading and structured products possessed by a bunch of former bankers working for the Vision Fund. The result could bring a new dimension to SoftBank, similar to how the American buyout giants have become purveyors of real-estate, private-equity and credit strategies.The numbers being spoken of may be small relatively. But SoftBank’s core competence is in a specific sector, technology, and a specific category, late-stage venture capital. It needs to be crystal clear about why it would have an edge in the listed markets. The new offshoot would engage in financial engineering by wrapping listed investments in leveraged structures. But would it be looking to hire people or engage advisers with that expertise in a public-equity strategy if it didn’t already have it on the payroll? Or is the tail wagging the dog?SoftBank shares trade at a near 60% discount to net asset value, hence Elliott’s interest. That’s due largely to high-profile mishaps in the Vision Fund, such as WeWork, even though the fund still accounts for only a 10% slice of SoftBank’s overall managed assets. The risk is that, as with the Vision Fund, this venture has an outsized impact on sentiment toward SoftBank overall.Ironically, SoftBank has a huge opportunity already to dabble in the stock market and do financial engineering. The discount at which its shares trade means it could buy nearly $50 billion of underlying investments by spending $20 billion on its own stock. Son could fund such a buyback either by raising debt or selling some of SoftBank’s shares in Alibaba Group Holding Ltd., Sprint Corp., telecoms subsidiary SoftBank Corp. or even chipmaker Arm Holdings via a public offering. Maybe the brains in the Vision Fund could start by identifying which of these levers to pull.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SoftBank-backed Oyo says annual loss grew over six-fold on China expansion
    Reuters

    SoftBank-backed Oyo says annual loss grew over six-fold on China expansion

    SoftBank-backed Oyo Hotels and Homes said on Monday losses widened more than six-fold in the year to March 2019, as the India-based hotel chain spent heavily to expand into China. The news comes weeks after Oyo began laying off roughly 2,000 employees in India, as it inches toward profitability, and days after its major investor SoftBank Group reported dismal quarterly results. The Japanese firm owns about 46% of Oyo.

  • Bloomberg

    SoftBank Fund Draws Investors for Hedge Fund-Style Vehicle: FT

    (Bloomberg) -- The head of SoftBank Group Corp.’s $100 billion Vision Fund has billions of dollars of support for a hedge fund-style vehicle, according to the Financial Times, citing people with direct knowledge of the matter who weren’t identified.Rajeev Misra, head of the Vision Fund, has support from Abu Dhabi’s state fund Mubadala and the government of Kazakhstan, one person involved in the talks said. The two funds are considering putting up as much as $4 billion together for the vehicle, the person added, the newspaper reported.Akshay Naheta, a former hedge fund manager and one of Misra’s closest allies at SoftBank’s investments unit, would manage the new Abu Dhabi-based fund, three of the people said.Naheta drove the money-making bet on German payments company Wirecard AG last year, made through the SoftBank Strategic Investment Fund, the FT said. That fund will be used for the new trading strategy, it added.To contact the reporter on this story: Hailey Waller in New York at hwaller@bloomberg.netTo contact the editors responsible for this story: James Ludden at jludden@bloomberg.net, Linus Chua, Steve GeimannFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SoftBank Founder Son Says He’s Open to Working With Elliott
    Bloomberg

    SoftBank Founder Son Says He’s Open to Working With Elliott

    (Bloomberg) -- SoftBank Group Corp. founder Masayoshi Son opened the door to making at least some of the changes championed by activist investor Paul Singer, after the Japanese company reported a second quarter of losses from its startup investing.Son called Singer’s Elliott Management Corp. an “important partner” and said he is in broad agreement with the investor about SoftBank buybacks and share value. Son said he is on the side of shareholders, especially since he is the largest stockholder at the company. The two billionaires held discussions a couple weeks ago, he said.Son is adopting a more conciliatory stance just as he’s stumbling with his signature effort -- the $100 billion Vision Fund, which made him the biggest investor in technology. The fund lost money in the three months ended in December, one quarter after the meltdown at WeWork triggered a record loss for the Japanese company. On Wednesday, Son said he is no longer targeting $108 billion for a second fund and SoftBank may finance the effort on its own.“We are thankful that such a distinguished investor has joined us as a friend,” Son said at a press conference in Tokyo to discuss earnings. “We are basically in agreement on carrying out large buybacks when the finances allow it.”Elliott disclosed a stake of almost $3 billion in SoftBank this month, arguing the company’s shares are substantially undervalued compared with its assets. It has advocated for a share buyback of as much as $20 billion, along with governance changes and more transparency about its investments.The Vision Fund lost 225.1 billion yen ($2.05 billion) for the three months ended in December. SoftBank Group reported a slim operating profit of 2.6 billion yen, compared with the 344.7 billion yen average of analyst estimates.The past 12 months have been a roller coaster for Son and SoftBank investors alike. A year ago, the company unveiled a record buyback, sparking a rally that pushed shares to the highest since its dot-com peak in 2000. Uber Technologies Inc.’s disappointing public debut and the implosion of WeWork wiped out the gains over the next few months. But SoftBank surged again in the past week after Singer disclosed his stake and Son won approval to sell his Sprint Corp. to T-Mobile US Inc.SoftBank shares are up about 21% this year. They were little changed in Tokyo trading Thursday.Son focused on the positive in the presentation to shareholders and the media in Tokyo. He said the Vision Fund is on track to return to profit in the current quarter. The eight portfolio companies that are publicly trading, including Uber, Slack Technologies Inc. and Guardant Health Inc., have added $3 billion in paper profit in the current three months, he said.“At the last earnings briefing I used the words ‘I regret’ 20 times. But after a difficult winter always comes spring,” Son said. “The tide is turning,” he added, standing in front of a slide with the same words and a crashing wave.The most dramatic change in portfolio value since the quarter closed was Uber, whose shares have climbed more than 35% this year. That, Son said, means the Vision Fund’s stake is now worth $1.5 billion more than its investment, compared with $1 billion less at the end of December.The Vision Fund’s overall performance was murkier. SoftBank said the fund’s portfolio remained unchanged from the previous quarter at 88 investments. It reported a gain in valuation for 29 companies in the December quarter, while 31 saw their worth decline. The unrealized gain on the investments, or the difference between the cost at which it acquired the stakes and their present fair value, shrunk to $5.2 billion. That’s less than a third of the paper profit SoftBank reported six months ago.Atul Goyal, an analyst at Jefferies Group, pointed out that the losses at Vision Fund essentially wiped out profits created by the rest of the company.“These results validate our concerns that most other things that SBG does outside of Alibaba have led to distractions or value destruction,” he wrote in a research note.Vision Fund 2 Is Risk to SoftBank Investors, Analyst Says (Video)SoftBank said it is introducing new governance standards for its portfolio companies, including the composition of the board of directors, founder and management rights, rights of shareholders, and mitigation of potential conflicts of interest. The new rules will “enhance value creation and liquidity” at portfolio companies, it said in a statement.Elliott wants SoftBank to set up a special committee to review the investment process at the Vision Fund, which it thinks has dragged on the share price despite making up a small portion of assets under management, people familiar with the matter have said.Son’s best bet to date is still the investment he made in Alibaba two decades ago. In the latest quarter, SoftBank said it booked a 331.9 billion yen gain from the e-commerce giant’s listing in Hong Kong.That deal turned Son’s $20 million into a stake worth over $130 billion, a spectacular return that cemented his reputation as an investor and helped him raise the original $100 billion Vision Fund. But the track record since then has been spotty. In addition to the WeWork fiasco, he suffered setbacks at portfolio companies, including Wag Labs, Zume Pizza and Brandless Inc.Son, asked repeatedly about the second Vision Fund at the conference in Tokyo, said he still wants to raise the money but acknowledged the WeWork troubles have set back those plans. Major backers of the first fund, Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Co., have remained on the sidelines so far. He said SoftBank may start with a smaller, bridge fund so it can keep doing deals.“A lot of our planned investors have been worried by the trouble at WeWork and Uber and we heard their feedback,” Son said. “It’s fully possible for us to carry on investing entirely with our own funds.”He wasn’t precise about what the size of the fund would be, and said that it “seems right that the scale is somewhat reduced this time.”At a Milken Institute conference in Abu Dhabi on Wednesday, Vision Fund head Rajeev Misra said that the second fund has already made seven investments and another six are in the pipeline. About a dozen companies from the first fund are expected to list in the next 18 months, he said.“There’s no rush, they don’t need capital,” Misra said. “A lot of them won’t even raise capital through an IPO, it will be a direct listing.”SoftBank has weighed contributing $40 billion to $50 billion for the second fund, people familiar with the matter have said.“The company will struggle to fund both Vision Fund II and buybacks unless they get a large outside commitment to VF II,” Chris Lane, an analyst with Sanford C. Bernstein, said prior to the announcement.SoftBank’s last share re-purchase was announced about a year ago, a record 600 billion yen.The company’s own sum-of-parts calculation puts its total value at more than 12,000 yen a share. That’s more than double SoftBank’s actual share price, which values the company at about $110 billion. Elliott thinks SoftBank’s net asset value could be about $230 billion, people familiar with the discussions have said.Son urged investors to focus on SoftBank’s shareholder value, which would include its stake in Alibaba, rather than operating profit, which is swayed by share price fluctuation in investments like Uber. To illustrate, he showed a slide with a famous visual illusion that can look like a duck or a rabbit depending on perspective.“The only measure by which SoftBank, an investment company, should be evaluated by is whether shareholder value rises or falls,” he said.(Updates with shares in eighth paragraph)\--With assistance from Nicolas Parasie.To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Takahiko Hyuga in Tokyo at thyuga@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter ElstromFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • A stock and a hard place: SoftBank's $150 billion Alibaba warchest in spotlight
    Reuters

    A stock and a hard place: SoftBank's $150 billion Alibaba warchest in spotlight

    SoftBank CEO Masayoshi Son threw cold water on Wednesday on the idea of cutting his firm's $150 billion stake in e-commerce giant Alibaba , after prominent activist investor Elliott Management called for big buybacks. The emergence of New York-based Elliott as a SoftBank shareholder has renewed focus on the company's 26% stake in China's Alibaba, the Japanese firm's biggest asset and Son's most successful tech bet to date. Elliott, one of the world's best known activist investors, has amassed a holding of almost $3 billion in SoftBank.

  • Asian Markets Post Solid Gains While Experts Differ on Coronavirus Peak
    FX Empire

    Asian Markets Post Solid Gains While Experts Differ on Coronavirus Peak

    While Chinese health officials said the situation was World under control, the Health Organization (WHO) warned the epidemic posed a global threat potentially worse than terrorism.

  • SoftBank profit wiped out by Vision Fund losses, second fund scaled back
    Reuters

    SoftBank profit wiped out by Vision Fund losses, second fund scaled back

    Quarterly profit at SoftBank Group Corp was almost wiped out as the Japanese technology giant was hit for a second straight quarter by losses at its $100 billion Vision Fund. Wednesday's dismal results could further dampen investor enthusiasm for founder Masayoshi Son's big bets on untested start-ups. While Son told a news conference SoftBank had turned a corner, he also said he has been forced to scale back a second Vision Fund while investing with only SoftBank's own capital.

  • SoftBank Stock Surges 14% After Sprint Sale Wins Approval
    Bloomberg

    SoftBank Stock Surges 14% After Sprint Sale Wins Approval

    (Bloomberg) -- Masayoshi Son is finally getting some good news.After a punishing year, the founder of SoftBank Group Corp. won approval for the sale of his Sprint Corp. to T-Mobile US Inc., a long-delayed acquisition that had been fiercely opposed by states including New York and California. The deal would extract the Japanese billionaire from the cash-draining U.S. wireless business and remove about $40 billion in net debt from his balance sheet. Sprint shares rose 78% in U.S. trading Tuesday after a federal court approved the deal, while SoftBank’s stock surged 14% in Tokyo.Son has been struggling to regain his footing after the meltdown at WeWork last year. Following the co-working startup’s failed initial public offering, he suffered setbacks at portfolio companies, including Wag Labs, Zume Pizza and Brandless Inc. The U.S. activist investor Elliott Management Corp. just took a stake in SoftBank, arguing its shares are undervalued.The Sprint sale helps Son in several ways. SoftBank will no longer face the risk of having to fund the wireless operator, a huge debt load will move off its balance sheet and Son will have more flexibility in raising capital for a share buyback or for his planned second $100 billion investment fund. Son will also have something to talk up to investors when he reports financial results on Wednesday.“This is obviously great news for Sprint,” said Kirk Boodry, an analyst at Redex Holdings who writes for Smartkarma. “It is better news for SoftBank.”SoftBank shares’ jump is the most in a year on an intraday basis, pushing the company’s market value to more than $110 billion. Son’s net worth rose more than $2 billion to $18.9 billion, according to Bloomberg Billionaries Index calculations.The stock has gained about 20% this year including today’s increase.The terms of the T-Mobile deal are likely to be revised because the original deal has expired, Boodry said, which means SoftBank may end up with a smaller stake in the combined company. But SoftBank won’t be on the hook for what Boodry estimates would be a potential $5 billion to $10 billion in capital investments. The two companies said they plan to close as soon as April 1.SoftBank Group is expected to return to profitability in the December quarter after reporting a loss of more than 700 billion yen ($6.4 billion) in the previous quarter, including the writedown at WeWork. Still, operating profit is projected to fall about 20% to 345 million yen, according to estimates compiled by Bloomberg.In recent years, Son has overhauled his company to focus on startup investments and shift away from the more traditional telecom business. He set up the $100 billion Vision Fund in 2017 with the goal of becoming the biggest investor in technology. He even sold a stake in his Japanese wireless operation to public shareholders so he could focus on deals. For several quarters, his performance seemed strong as startup valuations rose and SoftBank regularly booked gains.But Uber Technologies Inc., one of SoftBank’s biggest bets, stumbled as it went public last year. Then WeWork’s valuation crashed from $47 billion to less than $8 billion. Public investors suddenly turned their backs on the fast-growing, money-losing startups that SoftBank had favored.In taking its stake, Elliott has urged SoftBank to buy back its shares because of their discount, arguing it could spend as much as $20 billion by trimming investments in companies like Sprint and Alibaba Group Holding Ltd. The New York hedge fund also wants SoftBank to boost the independence and diversity on its board and bring more transparency to its investment approach.Son is still determined to raise a second Vision Fund, originally targeting at least $100 billion. His early backers are reconsidering their commitments. But SoftBank has weighed contributing $40 billion to $50 billion, people familiar with the matter have said.With the Sprint sale heading for completion, Son would have more flexibility with his finances. The deal won’t bring in capital because SoftBank’s Sprint shares will be converted into stock in the combined entity. But he will be able to borrow against the equity, which is likely to be worth more given the early share reaction.“It certainly changes the conversation,” said Chris Lane, an analyst with Sanford C. Bernstein. “This is the first piece of good news in quite a while.”(Updates with share price from second paragraph.)\--With assistance from Pei Yi Mak and Andrew Heathcote.To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Takahiko Hyuga in Tokyo at thyuga@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter ElstromFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SoftBank stock surges to seven-month high after judge OKs Sprint-T-Mobile merger
    Reuters

    SoftBank stock surges to seven-month high after judge OKs Sprint-T-Mobile merger

    SoftBank Group Corp stock surged to its highest price in over half a year in Tokyo on Wednesday, after a U.S. federal judge rejected an antitrust challenge to the proposed takeover of subsidiary Sprint Corp by T-Mobile US Inc . The ruling brings the Japanese technology conglomerate a significant step closer to slashing its exposure to a troubled asset at a time when other major bets face investor scepticism, and as it struggles to find backing for a successor to its $100 billion (77.13 billion pounds)Vision Fund. "This is obviously great news for Sprint... It is better news for SoftBank," analyst Kirk Boodry at Redex Holdings wrote in a note on the Smartkarma platform.

  • SoftBank-backed Brandless shuts its doors for good
    TechCrunch

    SoftBank-backed Brandless shuts its doors for good

    Brandless, a San Francisco-based e-commerce company that made and sold an assortment of "cruelty-free" products in beauty and personal care, household, baby and pet categories, has shut its doors less than three years after officially opening them in July 2017. In July of 2018, Brandless announced that SoftBank’s $100 billion Vision Fund had invested $240 million in the company in a deal that valued Brandless at a little over $500 million. As has happened across numerous companies backed by the Vision Fund, including Wag and more recently WeWork, it also meant an executive shake-up.

  • SoftBank set for sharp quarterly profit drop amid pressure from Elliott
    Reuters

    SoftBank set for sharp quarterly profit drop amid pressure from Elliott

    Japan's SoftBank Group is expected to post a slide in profits for the past quarter, deepening concern about its ability to secure funding for a second Vision Fund and giving activist fund Elliott Management more fodder for a shake-up. Elliott, the New York-based fund founded by billionaire Paul Singer, has amassed a stake of almost $3 billion in SoftBank and is pushing for changes including $20 billion in stock buybacks, sources said last week. The emergence of Elliott, one of the world's most powerful activist investors, as a prominent SoftBank shareholder is likely to highlight the Japanese conglomerate's difficulties following its soured bet on office-sharing startup WeWork.

  • As its fundraising lags, SoftBank's second Vision Fund could be near-sighted
    TechCrunch

    As its fundraising lags, SoftBank's second Vision Fund could be near-sighted

    SoftBank, the technology conglomerate that transformed the venture capital industry and made waves in the technology world with its $100 billion Vision Fund, may not be able to repeat the performance or sustain its revolutionary approach to tech investing, The Wall Street Journal reports. According to the Journal, SoftBank may only be able to raise half of the $108 billion target it had set for its sequel to the Vision Fund -- with most of that money coming from the Japanese company itself. Big backers like the Saudi Arabian sovereign wealth fund (which helps support the financial stability of a regime responsible for assassinating journalists), and Abu Dhabi's Mubadala Investment Co. both balked at SoftBank's attempts to set up Vision Fund II, telling SoftBank that it would have to use capital from the profits made off of previous investments to finance the second firm.