Japan’s SoftBank, a big investor in technology companies, has certainly regained its confidence after a humbling 2019. Whether that confidence persists through the next market downturn is another question.
SoftBank’s founder Masayoshi Son is clearly upbeat. During Monday’s earnings briefing for the quarter ending in December, he compared SoftBank to a producer of golden eggs. It is surely producing a few lately. Food-delivery company DoorDashnetted $8.3 billion for SoftBank’s $100 billion Vision Fund after an initial public offering in December was well-received. The 40% rise in Uber’s share price last quarter also pushed up the fund’s paper profits in the ride-hailing giant to $3.6 billion. And SoftBank is in the process of selling chip designer Arm to rival Nvidia. The Japanese company booked ¥1.77 trillion of investment gains last quarter, equivalent to $16.7 billion, mostly from the Vision Fund and its $10 billion successor.
Even WeWork, the office-sharing company that produced spectacular losses for SoftBank in 2019, may finally be turning a corner. The company is in talks to come to public markets to combine with a special-purpose acquisition company, The Wall Street Journal reported last month. Buoyant stocks mean SoftBank may keep listing some of its investments at high valuations, bringing additional windfalls.
SoftBank’s net asset value, however, fell by $37 billion last quarter: mostly because of the troubles of the company’s biggest investment, Alibaba. The Chinese e-commerce giant’s stock fell 21% in the quarter as the company was embroiled in antitrust investigations.
SoftBank’s share price nonetheless has continued to go up: it is now just 6% off its all-time high during the dot-com boom. SoftBank’s asset sales and buybacks last year helped narrow the discount of its market value to its net asset value.
Everything looks rosy when stocks keep going up: With a new round of stimulus and the Fed in the market’s corner that could continue for a while. SoftBank probably has more golden eggs to serve up in the meantime.
This story has been published from a wire agency feed without modifications to the text.
