SoftBank 🕴

While not a stock we cover (listed only in Tokyo), SoftBank comes up a lot in our conversations. With their fingers in many tech pies, they are fast becoming a commonly referenced firm whenever we speak about tech companies.

With a recent downturn in valuations, and private equity under strain, the impact is being felt by the flagship Vision Fund.

Right now they are posting some serious record losses.

In fact, they are currently doing a share buy back to improve the price and even pledging their own shares as collateral. Not sure how it works doing a share buy back to improve the price while also offering your own shares as collateral which are impacted by the share buy back which is backed by… You get the point.

It is unlikely the current environment or past mistakes will slow the Vision Funds down. While their reputation has taken a few knocks, they still have the power when it comes to showing the cash to companies and their existing connections.

Depending on your view of active fund managers, SoftBank is either as visionary as their funds or as hype driven as WeWork.

Speaking of SoftBank and it’s investments. Opendoor, which does buying and selling of home online for a faster process, has done a second round of layoffs.

While another groan point for SoftBank it’s also some interesting insight into house prices and the housing marketing at this time, be it US focused.

According to Realtor.com, the number of U.S. homes for sale declined 15.7% year-over-year in the month of March, with the number of newly listed properties falling by 13.1% the week ending March 21 and by 34.0% for the week ending March 28.

One thing to note would be people who already had listing and under no additional pressure to sell (second property, live in tenants etc), selling to those who haven’t been affected or were already committed to buying. This versus people being forced to sell. Are the new listings in a pressure situation or is it business as usual for them?

I’m sure as the month goes on the house market situation, on both sides of the pond, will become clearer.

May 18th is the SoftBank quarterly reporting day.

We’ll see what WeWork’s value has been put at, as well as an insight into their portfolio and any deals they are progressing on.

Last September, he resigned as Alibaba’s chairman, and is also expected to step down from its board at its annual general shareholder’s meeting this year.

The company said last month it expects its $100 billion Vision Fund to lose about $16.5 billion, due largely to the near collapse of WeWork, and the impact of the COVID-19 pandemic on other portfolio companies, including Uber and Oyo.

It is also expected to post an annual operating loss of $12.5 billion.

Their investment in Uber is questionable as well now.

1 Like

SoftBank has now announced their 2019 numbers and it’s not a happy occasion.

The first fund has officially closed and we get some insight into the spend.

We also got some insights into the months ahead and the current struggles they are facing. With some sales being rumoured.

And while I’m posting TechCrunch links I might as well round it off with an article on Jack Ma leaving and the general outlook for tech investment in the future.

Looks like a lot of ego and hubris in one room and the chickens have come home to roost.

1 Like