Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: yadayada on May 16, 2014, 12:54:53 PM

Title: 9984 - Softbank
Post by: yadayada on May 16, 2014, 12:54:53 PM
Let's discuss softbank's business here, as there is already an alibaba thread. Given that it is likely Alibaba could be worth like 4-500 billion$ a couple years from now, Softbank with 34%, looks already pretty cheap. Their stake could be worth 140-180 billion$ years from now. They are not planning to sell at the IPO.

But what is their business worth? Market cap is 80 billion$. If you assume the alibaba gets a 100 billion$ (which seems on the low side) are their other businesses cheap at about 50 billion$? Does anyone have an opinion about that?
Title: Re: 9984 - Softbank
Post by: muscleman on May 16, 2014, 01:05:30 PM
I am invested through TPRE, which holds some softbank stocks. :)
http://www.gurufocus.com/news/257552/daniel-loeb-comments-on-softbank-corp
Title: Re: 9984 - Softbank
Post by: yadayada on May 16, 2014, 01:15:28 PM
This is like stock inception! Is there a list of their holdings somewhere? I couldnt find softbank in their 10k
Title: Re: 9984 - Softbank
Post by: LC on May 16, 2014, 01:52:09 PM
Wikipedia has a list of assets, not sure how up to date it is: http://en.m.wikipedia.org/wiki/SoftBank
They own stakes in yahoo japan and sprint among telcom assets. I think there was a bloomberg article recently exploring this angle
Title: Re: 9984 - Softbank
Post by: fareastwarriors on May 16, 2014, 02:05:52 PM

Masayoshi Son's $58 billion payday on Alibaba

http://www.businessweek.com/articles/2014-05-07/masayoshi-sons-58-billion-payday (http://www.businessweek.com/articles/2014-05-07/masayoshi-sons-58-billion-payday)
Title: Re: 9984 - Softbank
Post by: fareastwarriors on May 16, 2014, 02:09:57 PM
Son with Charlie Rose

http://www.bloomberg.com/video/softbank-ceo-masayoshi-son-charlie-rose-03-11-42hVejRiTYagXWH~9MohJQ.html (http://www.bloomberg.com/video/softbank-ceo-masayoshi-son-charlie-rose-03-11-42hVejRiTYagXWH~9MohJQ.html)
Title: Re: 9984 - Softbank
Post by: saltybit on May 17, 2014, 03:13:29 PM
Looks like more action will be coming soon

http://blogs.wsj.com/moneybeat/2014/05/16/softbank-to-sell-new-bonds-for-more-acquisitions/
Title: Re: 9984 - Softbank
Post by: saltybit on May 17, 2014, 11:24:19 PM
Barron's: Forget Yahoo! Softbank Is the Alibaba Play

http://online.barrons.com/news/articles/SB50001424053111903301904579566830459426854?mod=BOL_twm_mw
Title: Re: 9984 - Softbank
Post by: fareastwarriors on May 19, 2014, 11:45:18 AM
SoftBank Calls Off Asset Reshuffle

Sale of eAccess Shares Would Have Generated $4.4 Billion



http://online.wsj.com/news/articles/SB10001424052702304198504579571432039404634?mg=reno64-wsj (http://online.wsj.com/news/articles/SB10001424052702304198504579571432039404634?mg=reno64-wsj)
Title: Re: 9984 - Softbank
Post by: muscleman on May 20, 2014, 09:50:39 PM
This is like stock inception! Is there a list of their holdings somewhere? I couldnt find softbank in their 10k

TPRE uses insurance float to invest in Dan Leob's third point fund, managed in a separate account, but the positions are the same.
If you check Dan Leob's quarterly letters, you will know.
Title: Re: 9984 - Softbank
Post by: rpadebet on May 21, 2014, 07:23:24 AM
Seems very interesting now. Alibaba stake seems undervalued inside this company unless there is some big hole in some of the other holdings which I am missing.

A question for the board though. How would you characterize the main guy here? Do you think his Venture Capitalism is a repeatable process? This CEO Masa Son does have a very interesting story. To me, he seems to be more of an empire builder rather an opportunistic investor in the John Malone mold. Comforting thing here is, he seems to know his spots and tries to stick around it mostly.
Title: Re: 9984 - Softbank
Post by: yadayada on May 21, 2014, 08:19:29 AM
yeah in that interview he said he really liked zuckerberg's whatsapp buy for 19 billion. Maybe that was politics tho.
Title: Re: 9984 - Softbank
Post by: rpadebet on May 21, 2014, 08:41:35 AM
yeah in that interview he said he really liked zuckerberg's whatsapp buy for 19 billion. Maybe that was politics tho.

Exactly. That had me squirming as well. But then he has investments in many such mobile app startups, so excessive valuations to such companies should be good for his book as well.
Title: Re: 9984 - Softbank
Post by: fareastwarriors on September 28, 2014, 10:43:35 AM
SoftBank Is in Talks to Acquire DreamWorks Animation

Japanese Telecom CEO Masayoshi Son Expands Vision After Dropping T-Mobile Pursuit


http://online.wsj.com/articles/softbank-in-talks-to-acquire-dreamworks-animation-1411871716 (http://online.wsj.com/articles/softbank-in-talks-to-acquire-dreamworks-animation-1411871716)
Title: Re: 9984 - Softbank
Post by: fareastwarriors on October 02, 2014, 06:21:04 PM
Just days after talks to acquire DreamWorks Animation SKG Inc. DWA -7.29% stalled, Japanese conglomerate SoftBank Corp. 9984.TO -0.69% has agreed to pay $250 million for close to 10% of Hollywood production and finance company Legendary Entertainment.

The agreement gives SoftBank the right to invest an additional $750 million, in two equal installments, over the next several years.
 
The two companies will form a joint venture to exploit Legendary's movies and TV shows on digital and mobile platforms with a particular focus on China and India. Legendary, which focuses on superhero, science-fiction and fantasy films, has produced "Godzilla" and "Pacific Rim," among others, and invested in such movies as "The Dark Knight" and "300."

The company, which has a long-term movie partnership with Comcast Corp.'s CMCSA -0.17% Universal Pictures, recently expanded into television and digital entertainment.
Title: Re: 9984 - Softbank
Post by: fareastwarriors on October 30, 2014, 10:11:52 AM
Japan’s SoftBank Taking a Hard Look at America Movil Assets

Mexico Deal Would Give SoftBank Another Foothold In North America After Buying Sprint Last Year


http://online.wsj.com/articles/japans-softbank-taking-a-hard-look-at-america-movil-assets-1414687089 (http://online.wsj.com/articles/japans-softbank-taking-a-hard-look-at-america-movil-assets-1414687089)
Title: Re: 9984 - Softbank
Post by: innerscorecard on November 04, 2014, 07:45:02 AM
http://cdn.softbank.jp/en/corp/set/data/irinfo/presentations/results/pdf/2014/softbank_presentation_2014_002.pdf

See slide #15.
Title: Re: 9984 - Softbank
Post by: rpadebet on November 04, 2014, 08:17:23 AM
http://cdn.softbank.jp/en/corp/set/data/irinfo/presentations/results/pdf/2014/softbank_presentation_2014_002.pdf

See slide #15.

I agree,There seems to be a pretty big discount to NAV even with tax assumptions on BABA stake. given that they don't want to sell BABA @ today's prices their BABA stake is worth the entire market cap almost, implying the rest of the businesses just cover their debt and have no equity value. Today seems an interesting entry point given their biggest part BABA seems to be growing, while they are being penalized for Sprint's performance.
The issue I have is I don't see how the discount to NAV closes going forward. Don't see many catalysts in the near future.
Title: Re: 9984 - Softbank
Post by: innerscorecard on November 04, 2014, 08:31:53 AM
http://cdn.softbank.jp/en/corp/set/data/irinfo/presentations/results/pdf/2014/softbank_presentation_2014_002.pdf

See slide #15.

I agree,There seems to be a pretty big discount to NAV even with tax assumptions on BABA stake. given that they don't want to sell BABA @ today's prices their BABA stake is worth the entire market cap almost, implying the rest of the businesses just cover their debt and have no equity value. Today seems an interesting entry point given their biggest part BABA seems to be growing, while they are being penalized for Sprint's performance.
The issue I have is I don't see how the discount to NAV closes going forward. Don't see many catalysts in the near future.

I wonder why management chose to use market cap instead of enterprise value on the presentation.
Title: Re: 9984 - Softbank
Post by: usdtor05 on November 04, 2014, 12:17:47 PM
Regarding market cap likely because it is easier to understand in a business like Softbank with all of their consolidation issues. For example Sprint is consolidated and carries a ton of debt...do you value Sprint as a whole or do you take the equity portion(79.9%) of Sprint that they own...the second is easier to break out and wouldn't require backing out Minority Interests, etc.

On its face you have $112B in value from the public companies with the tax affect. Then you have Softbank Mobile and Telephony (and all the other asses that are not listed) to support roughly net $43B in Softbank debt (ex-Sprint Debt/Cash and ex-YAHOY cash). Softbank Mobile has other assets in there that make it hard to value (Gungho, Supercell, etc.) which came up today from an analyst at the meeting.

TTM Mobile/Telephony EBITDA are $11Bish (I haven't tried to back-out . So net debt/EBITDA is roughly 4x...If you give Mobile/Telephony 6x you get $66B or $23B equity value.

Tack that onto the $112B and you get around $135B equity value vs MC of $82B. SAy 60% upside or so plus you get Masa Son.
Title: Re: 9984 - Softbank
Post by: rpadebet on November 04, 2014, 12:52:28 PM
Regarding market cap likely because it is easier to understand in a business like Softbank with all of their consolidation issues. For example Sprint is consolidated and carries a ton of debt...do you value Sprint as a whole or do you take the equity portion(79.9%) of Sprint that they own...the second is easier to break out and wouldn't require backing out Minority Interests, etc.

On its face you have $112B in value from the public companies with the tax affect. Then you have Softbank Mobile and Telephony (and all the other asses that are not listed) to support roughly net $43B in Softbank debt (ex-Sprint Debt/Cash and ex-YAHOY cash). Softbank Mobile has other assets in there that make it hard to value (Gungho, Supercell, etc.) which came up today from an analyst at the meeting.

TTM Mobile/Telephony EBITDA are $11Bish (I haven't tried to back-out . So net debt/EBITDA is roughly 4x...If you give Mobile/Telephony 6x you get $66B or $23B equity value.

Tack that onto the $112B and you get around $135B equity value vs MC of $82B. SAy 60% upside or so plus you get Masa Son.

Good summary.
They are not going to divest BABA, so not sure backing out the tax affect makes any sense (Do we back out taxes from KO, WFC etc in BRK book value?). Not sure if it is even remotely likely, but couldn't they figure out a way to do a tax free spin off of BABA? (I would love this :P).

Just backing out full BABA stake, everything else including sprint, yahoo jp, telecom/mobile etc are today selling at abt -$10 bill equity. Totally wacky.

I don't know what makes the NAV discount go away. Do you?
Title: Re: 9984 - Softbank
Post by: usdtor05 on November 04, 2014, 12:57:46 PM
No there was a great write-up in the NYT I think awhile back (maybe a couple years I cant remember) that touched on companies that used to act as proxies and now are no longer needed...like softbank/baba.

He might need to find a way to put more money into sprint with their operations/the auctions coming up next year so not sure how he'd do that but could have to sell some baba although i am guesssing he is smart enough to figure out how to avoid that if he doesn't want to.
Title: Re: 9984 - Softbank
Post by: johngu on November 19, 2014, 02:18:19 AM
Regarding market cap likely because it is easier to understand in a business like Softbank with all of their consolidation issues. For example Sprint is consolidated and carries a ton of debt...do you value Sprint as a whole or do you take the equity portion(79.9%) of Sprint that they own...the second is easier to break out and wouldn't require backing out Minority Interests, etc.

On its face you have $112B in value from the public companies with the tax affect. Then you have Softbank Mobile and Telephony (and all the other asses that are not listed) to support roughly net $43B in Softbank debt (ex-Sprint Debt/Cash and ex-YAHOY cash). Softbank Mobile has other assets in there that make it hard to value (Gungho, Supercell, etc.) which came up today from an analyst at the meeting.

TTM Mobile/Telephony EBITDA are $11Bish (I haven't tried to back-out . So net debt/EBITDA is roughly 4x...If you give Mobile/Telephony 6x you get $66B or $23B equity value.

Tack that onto the $112B and you get around $135B equity value vs MC of $82B. SAy 60% upside or so plus you get Masa Son.

Good summary.
They are not going to divest BABA, so not sure backing out the tax affect makes any sense (Do we back out taxes from KO, WFC etc in BRK book value?). Not sure if it is even remotely likely, but couldn't they figure out a way to do a tax free spin off of BABA? (I would love this :P).

Just backing out full BABA stake, everything else including sprint, yahoo jp, telecom/mobile etc are today selling at abt -$10 bill equity. Totally wacky.

I don't know what makes the NAV discount go away. Do you?

I think this is a very important thing to think about.  The valuation discount is very compelling, but the story is also well known (well, perhaps well known to those of us who bother looking at SoftBank).  So, why does the discount exist?  And why to such a degree?  What is it that the market doesn't know?

Historically I think HoldCo's like SoftBank trade at a discount.  The complexity of the business makes it difficult to understand, so people tend to stay away.  There's also the uncertainty around the loss of value due to taxes depending on how the assets are disposed of.  Lastly, there's always the danger that the HoldCo is value destroyer (although Masa Son's history strongly indicates otherwise). 

The other danger I see is that the valuation of current assets are pretty high, so the valuation gap can close by having the value of the assets drop (like S, and who knows where BABA will go).  To me, the margin of safety is pretty high regardless, to make this a worthwhile investment - although I imagine patience with this stock is a must.  But I think it's a tremendously useful exercise to really search out the contra-view.  So, I would definitely appreciate any additional input as to why this would NOT be a good investment.
Title: Re: 9984 - Softbank
Post by: no_free_lunch on December 02, 2014, 10:35:57 AM
Value Vulture has some thoughts on Softbank:

Quote
Currently Softbank trades at a market value roughly equal to its ownership stake in Alibaba, which means you are getting Softbank Japan (the most profitable wireless network in Japan), Yahoo Japan (the dominant Japanese search engine), a resurgent Sprint, and $ billions worth of venture capital investments all for FREE. At the helm of the internet empire, Masa Son is a world class investor who has managed to compound Softbank’s stock over 20% a year since the company’s IPO in 1994.

I estimate that the NAV of Softbank’s ex-Alibaba assets to be $80 billion, which means the stock trades at a 50% NAV discount. Each of the components in the sum-of-parts calculation also has significant upside potential, especially Alibaba, which I think is VERY misunderstood in the West.

https://oraclefromomaha.wordpress.com/2014/11/02/update-im-back-at-least-for-a-while/
Title: Re: 9984 - Softbank
Post by: leeway on December 02, 2014, 11:52:06 AM
Should this comparison be made on the EV basis instead of market cap? Softbank has $65bn  debt net of cash (just looking at yahoo finance data), EV $143bn. Still cheap but prob not at 50% discount to NAV if the ex-baba parts worth $80 bn.
Title: Re: 9984 - Softbank
Post by: usdtor05 on December 02, 2014, 12:23:45 PM
no because 33B of that is sprint so if you just add the equity value of sprint then you are already accounting for that $33b. the rest is in japan and is basically coverd by wireless/telephony and then yahoo japan.
Title: Re: 9984 - Softbank
Post by: no_free_lunch on December 02, 2014, 06:38:22 PM
Leeway,

So yeah, trying to figure out the balance sheet is a bit of a nightmare on this one.  However, and I think I am just rehashing what usdtor said, the debt is for the subs.   A significant chunk of it is for Sprint but there is still a significant $30B for softbank itself.  However there are numerous functioning "softbank" companies that are 100% owned to which the debt can be attributed.  Things like Softbank mobile, Softbank telecom, Softbank america, Softbank korea, and so on.  Since they are 100% owned by Softbank aren't their debts included on the softbank parent's balance sheet, just like Sprint's are?  So if the debts are attributable to the subs and if industry peers have similar debt loads then you can value the subs based on interest-adjusted earnings and then the debt is cleared out.
Title: Re: 9984 - Softbank
Post by: no_free_lunch on December 02, 2014, 06:47:01 PM
It is also worth noting that the majority of the $30B debt attributable to Softbank is denominated in Yen and is financed at rates of 1-1.5%.
Title: Re: 9984 - Softbank
Post by: no_free_lunch on December 02, 2014, 07:11:13 PM
Found this Jefferies commentary on Softbank:

Quote
Jefferies also estimates that, for every 10% change in Alibaba’s stock, Softbank would move by 4.5% if you include 20% holding company discount.
..
How much is Softbank worth? At Alibaba’s $68 per share IPO price, Jefferies reckons it is worth 11,400 yen, or $56.5. If Alibaba trades at $95.2, Softbank would have another 13.9% upside, or 12,984 yen, or $64.35. Softbank closed at 8,207 yen today and its over-the-counter ADR closed at $40.1 on Friday. Even at the $68 IPO price, Softbank’s fair value – according to Jefferies – offers a 40% upside. Now that is some conglomerate discount. Note that Jefferies is on the bullish side of the street, whose average price target for Softbank is 9,931.82 yen.

Alibaba is currently trading for $110, so softbank could possibly be worth more than $64 per share?  However you also have to consider that Sprint has lost about $4B in market value since the article.  By my math the 2 roughly cancel out, so it should still have a roughly $64 per share value.   At currently prices it looks like that is 100% upside.    ??? 

http://blogs.barrons.com/asiastocks/2014/09/22/jefferies-alibaba-drives-softbank-but-its-just-one-of-the-gems/
Title: Re: 9984 - Softbank
Post by: usdtor05 on December 03, 2014, 07:59:57 AM
@nofreelunch, it is interesting in that softbank trades based on Sprint and the movement of the JPY more than based on Alibaba. Yahoo has moved up and Softbank has moved down as Alibaba moved higher.

All indications were that a price war was coming and it did...Marcelo basically came out and said it and then you saw the announcement yesterday. We decreased our Softbank sizing somewhat until that noise is cluttered as still not 100% sure if Verizon and AT&T can come down and fight the unlimited and the lower pricing. What I am basically saying is that we are not totally sure how Sprint gets the billions it needs for the next few years and then the billions it needs for the 2016 auction. Hempton thinks he sells off part of Alibaba to pay for it. If that is the case need to bake in tax implications which lowers our value of Alibaba in Softbank. We are fine dealing with general noise, question is can we see through it...not 100% sure we can with Sprint. Japan's devaluation is bad for the implications around funding Sprint but at least right now, it isn't catastrophic as they generate around $10BUSD of EBITDA, capex is coming down, and the interest on the $50B or so in Japan is negligible (right now) although the debt is massive.

It seems like everyone is quite happy with Yahoo's stake because there is some sort of visibility for how they exit whereas with Softbank that visibility does not exist...and we know it isn't going to exist any time soon.

With these sum of the parts, it's very hard to know when this turns but the fact that they have Masa Son is all we could ask for. To be honest though, Alibaba is scary for us.
Title: Re: 9984 - Softbank
Post by: no_free_lunch on December 03, 2014, 02:49:28 PM
Thanks for the feedback usdtor.

Regarding Sprint, it is only an $18.5B market cap, 80% of which is Softbank, so $15B to softbank.   Would it be so bad if they left Sprint to it's own devices and worst case write it off?  If the stock is moving up and down based on Sprint, and sprint is only about 10% of the company, well that seems strange.  It seems the biggest risk with Sprint is that more money gets thrown at it.

I agree though that AliBaba is a risk.  Still, the company is growing like mad and is getting some significant economies of scale.   I am sure it will get hammered if there is a market correction but the underlying value of the company seems fairly solid.
Title: Re: 9984 - Softbank
Post by: usdtor05 on December 03, 2014, 03:00:13 PM
That's not going to happen. Reputation here is far too important. He wants to be global.

Plus if he can make this work that $18/$15B will be forth far far more. Just a question of making the value good enough for people to switch which means having the network in place which means of course...cash.

He already did this once although he had the iPhone to help in Japan.

Also I am not sure what the legal implications are in terms of the debt, etc. Remember he paid for the Sprint shares in almost all debt too although it is very very cheap so he would have to still service that.

There are a lot of ifs here...but importantly you have someone who has done incredibly well historically.
Title: Re: 9984 - Softbank
Post by: innerscorecard on January 12, 2015, 12:39:15 AM
Anyone seen the December 2014 VIC writeup?
Title: Re: 9984 - Softbank
Post by: usdtor05 on January 12, 2015, 07:01:17 AM
Yes it was basically that things will work themselves out and give it time. Made the point that BABA shares are held in Sinagpore and therefore technically no capital gains taxes although company has said they would have to pay 20% taxes if they sold.
Title: Re: 9984 - Softbank
Post by: jeffmori7 on January 22, 2015, 06:05:54 AM
For those invested in Softbank, you own it through SFTBF, SFTBY, 9984?
Title: Re: 9984 - Softbank
Post by: simplefocus on January 22, 2015, 08:23:25 AM
I don't own SoftBank but if I was going to buy, I would buy 9984 because I don't like ADRs.  The fees that you have to pay every year to own the stock are ridiculous.
Title: Re: 9984 - Softbank
Post by: plato1976 on January 22, 2015, 08:30:59 AM
this fee will generally range from $0.01 - $0.03 per share

any idea what is the exact fee for SFTBY ?

I don't own SoftBank but if I was going to buy, I would buy 9984 because I don't like ADRs.  The fees that you have to pay every year to own the stock are ridiculous.
Title: Re: 9984 - Softbank
Post by: luck on January 22, 2015, 08:46:42 AM
I own SFTBY.  Also, here's an interesting article (published yesterday) on Softbank's potential and undervaluation by Vitaliy Katsenelson:

http://www.institutionalinvestor.com/blogarticle/3419649/blog/buying-warren-buffett-richard-branson-and-steve-jobs-at-a-discount.html#.VMEo5VZ4XwI
Title: Re: 9984 - Softbank
Post by: berkshire101 on January 22, 2015, 10:59:09 AM
I own SFTBY.  Also, here's an interesting article (published yesterday) on Softbank's potential and undervaluation by Vitaliy Katsenelson:

http://www.institutionalinvestor.com/blogarticle/3419649/blog/buying-warren-buffett-richard-branson-and-steve-jobs-at-a-discount.html#.VMEo5VZ4XwI

I'm tempted to start a position here.  Can anyone chime in on their debt situation? 
Title: Re: 9984 - Softbank
Post by: usdtor05 on January 22, 2015, 11:36:41 AM
Sure regarding their debt. About 90% of the non-Sprint debt is in JPY which basically gives you a hedge against the deteriorating Yen. Most of the corp bonds and the short/long term borrowings (at 1-2%) are Yen. The lease payments that are capitalized are also majority yen as far as I can tell.

If you figure the Wireless/Telephony business is worth $50B and the net debt is $40B then you have a negative impact with a depreciating Yen but not as bad as most people would think. Sprint after capex doesn't really cover their interest, Wireless/Telephony easily covers all non-Sprint debt.

So, we know they are going to have to fund Sprint somehow, just a matter of how Son does it. Or maybe this google deal will be really transformational and bring in some significant cash flow...you got me.
Title: Re: 9984 - Softbank
Post by: muscleman on January 22, 2015, 12:02:18 PM
What do you guys think about BABA's corp structure and Jack Ma's attempt to steal Alipay back in 2011?

http://www.forbes.com/sites/ericsavitz/2011/05/11/yahoo-discloses-jack-ma-takes-control-of-alipay-from-alibaba/
http://www.ft.com/intl/cms/s/2/40a66dd2-b9ec-11e0-8171-00144feabdc0.html#axzz3PZi6lWqf
Title: Re: 9984 - Softbank
Post by: usdtor05 on January 22, 2015, 12:21:14 PM
Personally I think if you are going to buy into Softbank you need to accept these type of things as part of the game. Not a great answer for you but it's the honest truth from my perspective. BABA is also public now so hopefully that helps with the chicanery.
Title: Re: 9984 - Softbank
Post by: Picasso on January 22, 2015, 12:42:34 PM
If you're worried about BABA, go short BABA against Softbank.  If you're worried about Sprint, go short S against Softbank.

I take the position that Masa is an excellent capital allocator and will make those decisions for me.  Softbank can borrow between 1-2% going out several years in an overvalued currency.  I think debt worries should take that into account and also realize that a lot of the debt comes in the form of non-recourse from Sprint since it consolidates on the parent company financials. 

My only worry with Softbank is the currency translation as a US investor.  Anytime I try to hedge the currency I screw something up so I'm plaing the dice a bit and letting the currency help/hurt in its entirety. 
Title: Re: 9984 - Softbank
Post by: usdtor05 on January 22, 2015, 02:30:31 PM
Picasso, i agree with the currency issues but there is an offset in that the majority of the debt is JPY (ex Sprint). The value of Wireless/Telephony at 5x eBITDA is 50B, the value of the net debt is $40B so net net it is negative as it depreciates but it's not one for one decrease. Now will the market react that way...not sure. But at least the actual numbers are favorable.
Title: Re: 9984 - Softbank
Post by: usdtor05 on January 22, 2015, 02:33:53 PM
Also if you are really worried about S I would make it an outsized short. At 12B it is 1/5 of the value. Including it's debt it is say $45B of EV plus the amount of debt he used to buy the shares..say $20B.

Personally I am liking what Marcelo done thus far. I think in the next year we are going to see massive restructuring (been announced) and a sale of the wireline business (last CC they were open to it). In terms of what S does to capture customers we will have to wait and see. At least we have a guy in there who knows there are real issues now.
Title: Re: 9984 - Softbank
Post by: innerscorecard on January 22, 2015, 07:37:58 PM
What do you guys think about BABA's corp structure and Jack Ma's attempt to steal Alipay back in 2011?

http://www.forbes.com/sites/ericsavitz/2011/05/11/yahoo-discloses-jack-ma-takes-control-of-alipay-from-alibaba/
http://www.ft.com/intl/cms/s/2/40a66dd2-b9ec-11e0-8171-00144feabdc0.html#axzz3PZi6lWqf

I don't think that for BABA this presents an uninvestable risk, for reasons I articulated in my most recent Seeking Alpha article.
Title: Re: 9984 - Softbank
Post by: innerscorecard on January 22, 2015, 07:39:35 PM
I own SFTBY.  Also, here's an interesting article (published yesterday) on Softbank's potential and undervaluation by Vitaliy Katsenelson:

http://www.institutionalinvestor.com/blogarticle/3419649/blog/buying-warren-buffett-richard-branson-and-steve-jobs-at-a-discount.html#.VMEo5VZ4XwI

Funny that this article came out at the exact time that the new Softbank idea on VIC became public.

This was better written. Long blocks or quotes from English-language interviews and articles, to me, added zero value to the VIC article.
Title: Re: 9984 - Softbank
Post by: usdtor05 on January 23, 2015, 07:08:54 AM
Pretty sure that they are both VIC members. I enjoyed the VIC write-up. A lot of this comes down to Son's ability and that's what the VIC article was getting at.
Title: Re: 9984 - Softbank
Post by: muscleman on January 26, 2015, 09:20:46 AM
Does anyone know if Softbank is classified as a PFIC for US investors?
Title: Re: 9984 - Softbank
Post by: fareastwarriors on January 29, 2015, 10:53:13 AM
Mayer’s Yahoo Plan Could Affect Softbank Interests


http://blogs.wsj.com/japanrealtime/2015/01/26/mayers-yahoo-plan-could-affect-softbank-interests/ (http://blogs.wsj.com/japanrealtime/2015/01/26/mayers-yahoo-plan-could-affect-softbank-interests/)
Title: Re: 9984 - Softbank
Post by: muscleman on February 04, 2015, 08:33:48 AM
Does anyone know if Softbank is classified as a PFIC for US investors? I am surprised that no one seems to know?
Title: Re: 9984 - Softbank
Post by: Picasso on February 04, 2015, 08:38:07 AM
Why would it be a PFIC?  This isn't a closed-end private equity fund that trades over a foreign market.
Title: Re: 9984 - Softbank
Post by: muscleman on February 04, 2015, 11:14:55 AM
Why would it be a PFIC?  This isn't a closed-end private equity fund that trades over a foreign market.

It is better to be safe than sorry. I know there are NYSE stocks that began to be classified as PFIC after a certain year, because the US company acquired a foreign company.

In terms of Softbank, it holds equity interests in a lot of internet companies. It also has its own mobile operations in Japan. So how does this count?
If its BABA stake appreciates, does that generate gross income? If it sells the BABA stakes, does that generate gross income? If yes, does that need to be applied to the following tests? It takes controlling stakes at most of its investments, or at least 20% equity stake. Does this account for "passive income", or should this be treated as its own operations?

http://en.wikipedia.org/wiki/Passive_foreign_investment_company

The income test is met if 75% or more of the foreign corporation's gross income is passive income, defined as foreign personal holding company income with modifications.

The asset test is met if 50% or more of the foreign corporation's average assets (as defined in the IR Code) produce, or could produce passive income, or are assets (such as cash and bare land) that produce no income. The test is applied based on the foreign corporation's adjusted basis, for U.S. tax purposes, of the assets, or at the election of the particular shareholder, fair market values of the assets.
Title: Re: 9984 - Softbank
Post by: Picasso on February 04, 2015, 11:23:32 AM
Sorry if I sound annoyed but this is a pretty easy thing to look up which might explain why no one answered.  Over 90% of Softbank's income is generated from the mobile/wireline business.  They hold minority interests in a lot of other businesses but you wont see that in the EPS, for the most part.
Title: Re: 9984 - Softbank
Post by: muscleman on February 04, 2015, 06:12:25 PM
Sorry if I sound annoyed but this is a pretty easy thing to look up which might explain why no one answered.  Over 90% of Softbank's income is generated from the mobile/wireline business.  They hold minority interests in a lot of other businesses but you wont see that in the EPS, for the most part.

I know that for GAAP accounting if the ownership is >20%, the minority net income will be included. If it is more than 80%, the whole balance sheet will be consolidated, except the net income will be deducted by the minority income.
BABA's 32% owned by Softbank, so will its income be included? I don't see that in the financial statements. I wonder if Japanese accounting is similar to GAAP?
Title: Re: 9984 - Softbank
Post by: innerscorecard on February 11, 2015, 06:02:42 PM
http://cdn.softbank.jp/en/corp/set/data/irinfo/presentations/results/pdf/2014/softbank_presentation_2014_003.pdf
Title: Re: 9984 - Softbank
Post by: usdtor05 on February 12, 2015, 06:45:30 AM
not gonna lie I miss the golden goose...interesting to see them drop the Yahoo Japan discussion as compared to previously. makes more sense the way he is doing it now though.
Title: Re: 9984 - Softbank
Post by: muscleman on March 08, 2015, 09:15:56 AM
Does anyone know the ADR fees for SFTBY? SFTBY is trading at a discount to the 9984 symbol. :)
Title: Re: 9984 - Softbank
Post by: fareastwarriors on March 25, 2015, 01:47:13 PM

SoftBank to Investors: ‘Forget About the Dividend’

http://blogs.wsj.com/moneybeat/2015/03/24/softbank-to-investors-forget-about-the-dividend/?mod=WSJBlog&mod=overheard
Title: Re: 9984 - Softbank
Post by: fareastwarriors on April 23, 2015, 03:40:05 PM
Silicon Valley Veteran Steers SoftBank’s Deals

Former Google executive broadens scope of Japanese tech firm’s investments

http://www.wsj.com/articles/silicon-valley-veteran-steers-softbanks-deals-1429824909 (http://www.wsj.com/articles/silicon-valley-veteran-steers-softbanks-deals-1429824909)
Title: Re: 9984 - Softbank
Post by: no_free_lunch on May 14, 2015, 09:26:28 PM
Found an interesting article on Sprint at seeking alpha.  The author suggests that their spectrum alone could be worth in the neighborhood of $100B which would imply significant upside for the stock.  No idea if the number is realistic.

Quote
The latest FCC AWS-3 auction, which provides companies the opportunity to bid for spectrum leases was the largest in history, raising $41.3 BB. Based on the valuation placed on spectrum in this most recent auction, Sprint's 2.5 GHz holdings may now be worth between $86 BB and $115 BB, far more than the $14 BB paid and $11.8 BB recorded.

In addition to the 150 MHz of valuable 2.5 GHz spectrum holdings, there also is substantial value in Sprint's SRM and PCS licenses. Looking back at the latest spectrum swap between Verizon and T-Mobile, which occurred in 2014, Sprint's SRM and PCS holdings could be worth $6.9 BB and $14.8 BB, respectively. Adding these pieces to the value of the 2.5 GHz holdings, Sprint's total licenses could be valued in excess of $100 BB.

http://seekingalpha.com/article/3183056-sprint-is-worth-more-than-you-think
Title: Re: 9984 - Softbank
Post by: muscleman on May 15, 2015, 09:23:17 AM
Thank you! I looked at S's first quarter and found this part confusing:
http://www.sec.gov/Archives/edgar/data/101830/000010183015000009/sprint4qfy14earningsrelease.htm
Postpaid net additions of 211,000 compared to net losses of 231,000 in the prior year quarter
Postpaid phone losses of 201,000 improved sequentially for the fourth consecutive quarter and improved by nearly 500,000 year-over-year

So what does this mean by "net additions of 211,000" and "losses of 201,000"?

 ::)
Title: Re: 9984 - Softbank
Post by: constructive on May 15, 2015, 09:35:02 AM
Postpaid net additions of 211,000 compared to net losses of 231,000 in the prior year quarter
Postpaid phone losses of 201,000 improved sequentially for the fourth consecutive quarter and improved by nearly 500,000 year-over-year

So what does this mean by "net additions of 211,000" and "losses of 201,000"?

The next bullet makes it clear. They are signing up tablets faster than they are losing phones.
Title: Re: 9984 - Softbank
Post by: Phaceliacapital on July 06, 2015, 08:39:36 AM
Looked at this:

Assumptions: 15% discount on publicly traded stocks for control/liquidity.


Mcap: 69.280
Net Debt: 42

EV: 111.28

Key Assets quoted (includes haircut):

Alibaba: 55.09
Sprint: 12.194
Yahoo Jap: 8.719
Gungho: 8.2

Key Assets - Private:

Mobile at EBITDA 1.149 bn JPY times 5x EV/EBITDA = 46.8
Fixed at EBITDA 160 mn JPY times 5x EV/EBITDA = 6.528

Total= 137.577

Holding discount: 10%

Total Value = 123.819 bn USD

EV = 111.280 bn USD

Implied negative value 12.539 bn (kind of cancels out Sprint stake).

Do you guys see any errors?

EDIT: Maybe easier if I add a spreadsheet screenshot:

Title: Re: 9984 - Softbank
Post by: plato1976 on July 06, 2015, 09:16:04 AM
I think a big chunk of the debt is under sprint instead of the parent company

Looked at this:

Assumptions: 15% discount on publicly traded stocks for control/liquidity.


Mcap: 69.280
Net Debt: 42

EV: 111.28

Key Assets quoted (includes haircut):

Alibaba: 55.09
Sprint: 12.194
Yahoo Jap: 8.719
Gungho: 8.2

Key Assets - Private:

Mobile at EBITDA 1.149 bn JPY times 5x EV/EBITDA = 46.8
Fixed at EBITDA 160 mn JPY times 5x EV/EBITDA = 6.528

Total= 137.577

Holding discount: 10%

Total Value = 123.819 bn USD

EV = 111.280 bn USD

Implied negative value 12.539 bn (kind of cancels out Sprint stake).

Do you guys see any errors?

EDIT: Maybe easier if I add a spreadsheet screenshot:
Title: Re: 9984 - Softbank
Post by: Phaceliacapital on July 06, 2015, 09:23:55 AM
The 42 excludes Sprint's debt.
Title: Re: 9984 - Softbank
Post by: Phaceliacapital on July 22, 2015, 02:04:06 AM
https://investingsidekick.com/softbank-corp-tks9984/
Title: Re: 9984 - Softbank
Post by: supertutti on August 19, 2015, 06:30:35 AM
http://www.bloomberg.com/news/articles/2015-08-19/softbank-s-arora-to-buy-483-million-of-stock-as-personal-bet-
Title: Re: 9984 - Softbank
Post by: fareastwarriors on August 19, 2015, 10:42:22 AM
http://www.bloomberg.com/news/articles/2015-08-19/softbank-s-arora-to-buy-483-million-of-stock-as-personal-bet-

wow.
Title: Re: 9984 - Softbank
Post by: no_free_lunch on August 22, 2015, 06:18:31 PM
It doesn't sound like Softbank will be putting much more into Sprint.  I am in favor of that.

Quote
“I was thinking to myself: ‘I made one of the biggest mistakes in my life,’ which was the misjudgment of the U.S. regulatory environment,” he says in the interview. Once the T-Mobile deal was dead, Mr. Son decided to “move on to the rest of the world and other businesses,” he says.
..
"I’m a busy guy,” he adds. “Why should I even concentrate on the U.S. market when the situation does not look good?”
..
Those are ominous signs for Sprint. In addition, Mr. Arora has privately expressed his frustration with SoftBank’s ownership of Sprint and has recommended trying to sell it, say people familiar with the matter.
..
Mr. Son declines to comment on the meetings but concedes in the interview that Sprint doesn’t look attractive to potential buyers right now.

“If nobody wants to buy it and we still have the customers, we still have employees, so I have to take care,” he says.
Title: Re: 9984 - Softbank
Post by: no_free_lunch on August 26, 2015, 08:02:34 AM
Sold out of SFTBY at about a 10% loss, however money got put into other positions that are down similar or greater amounts.   BABA is such a large part of the story that it is scary to hold this with what is going on in China and even with the existing decline in BABA, the sftby price makes a lot less sense.  I am also not bullish on Sprint so there is not enough left to justify holding it. 
Title: Re: 9984 - Softbank
Post by: frank on August 26, 2015, 09:16:15 PM
Sold out of SFTBY at about a 10% loss, however money got put into other positions that are down similar or greater amounts.   BABA is such a large part of the story that it is scary to hold this with what is going on in China and even with the existing decline in BABA, the sftby price makes a lot less sense.  I am also not bullish on Sprint so there is not enough left to justify holding it.

BABA's Taobao and Tmall business will be much larger five years from now regardless of whether China goes into a recession or not as the migration of common folk's everyday purchasing from offline to online is still on-going and well and for many small businesses Taobao is still be the only viable destination to sell to masses across the country.   The thing I would really need to make sure is just what price I pay for the stock and what goes into my valuation equation as I think exchange rate and discretionary income growth rate are now much harder to predict than a year ago.  Also, I think competition is building in the B2C business and it's totally possible that Tmall will lose share in the long run to JD and the likes.
Title: Re: 9984 - Softbank
Post by: ScottHall on August 26, 2015, 10:53:02 PM
I bought this one off of like two hours of research, but the way I see it, a lot of the value isn't necessarily in the big holdings today. Those provide a floor, so to speak, but the part I'm interested in is future capital allocation. I basically view Softbank as a (historically very successful) VC firm, and I'm happy to partner up for the long haul. Maybe this will prove to be a mistake, but I like the odds.
Title: Re: 9984 - Softbank
Post by: innerscorecard on August 26, 2015, 11:16:29 PM
Sold out of SFTBY at about a 10% loss, however money got put into other positions that are down similar or greater amounts.   BABA is such a large part of the story that it is scary to hold this with what is going on in China and even with the existing decline in BABA, the sftby price makes a lot less sense.  I am also not bullish on Sprint so there is not enough left to justify holding it.

BABA's Taobao and Tmall business will be much larger five years from now regardless of whether China goes into a recession or not as the migration of common folk's everyday purchasing from offline to online is still on-going and well and for many small businesses Taobao is still be the only viable destination to sell to masses across the country.   The thing I would really need to make sure is just what price I pay for the stock and what goes into my valuation equation as I think exchange rate and discretionary income growth rate are now much harder to predict than a year ago.  Also, I think competition is building in the B2C business and it's totally possible that Tmall will lose share in the long run to JD and the likes.

The worst case scenario to me is that Taobao becomes marginalized like eBay by someone like JD.com, so that people only shop for niche goods on Taobao or even Tmall. Now I don't think that will happen, based on what I know about Chinese consumer preferences.
Title: Re: 9984 - Softbank
Post by: innerscorecard on August 26, 2015, 11:17:39 PM
I bought this one off of like two hours of research, but the way I see it, a lot of the value isn't necessarily in the big holdings today. Those provide a floor, so to speak, but the part I'm interested in is future capital allocation. I basically view Softbank as a (historically very successful) VC firm, and I'm happy to partner up for the long haul. Maybe this will prove to be a mistake, but I like the odds.

They kind of stopped doing that:

http://www.livemint.com/Companies/rCVHvx2GglnyKdVDhcpkPI/SoftBank-to-shut-down-venture-capital-arm-report.html
Title: Re: 9984 - Softbank
Post by: ScottHall on August 27, 2015, 12:22:46 AM
I bought this one off of like two hours of research, but the way I see it, a lot of the value isn't necessarily in the big holdings today. Those provide a floor, so to speak, but the part I'm interested in is future capital allocation. I basically view Softbank as a (historically very successful) VC firm, and I'm happy to partner up for the long haul. Maybe this will prove to be a mistake, but I like the odds.

They kind of stopped doing that:

http://www.livemint.com/Companies/rCVHvx2GglnyKdVDhcpkPI/SoftBank-to-shut-down-venture-capital-arm-report.html

I don't really think so. Maybe our definitions of VC are different.

Quote
After shutting its VC unit, SoftBank will invest directly in late stage start-ups,
Title: Re: 9984 - Softbank
Post by: muscleman on August 27, 2015, 07:13:01 AM
Sold out of SFTBY at about a 10% loss, however money got put into other positions that are down similar or greater amounts.   BABA is such a large part of the story that it is scary to hold this with what is going on in China and even with the existing decline in BABA, the sftby price makes a lot less sense.  I am also not bullish on Sprint so there is not enough left to justify holding it.

BABA's Taobao and Tmall business will be much larger five years from now regardless of whether China goes into a recession or not as the migration of common folk's everyday purchasing from offline to online is still on-going and well and for many small businesses Taobao is still be the only viable destination to sell to masses across the country.   The thing I would really need to make sure is just what price I pay for the stock and what goes into my valuation equation as I think exchange rate and discretionary income growth rate are now much harder to predict than a year ago.  Also, I think competition is building in the B2C business and it's totally possible that Tmall will lose share in the long run to JD and the likes.

The worst case scenario to me is that Taobao becomes marginalized like eBay by someone like JD.com, so that people only shop for niche goods on Taobao or even Tmall. Now I don't think that will happen, based on what I know about Chinese consumer preferences.

Could you please tell me a bit about Chinese consumer preferences?
Title: Re: 9984 - Softbank
Post by: muscleman on August 27, 2015, 07:13:54 AM
I bought this one off of like two hours of research, but the way I see it, a lot of the value isn't necessarily in the big holdings today. Those provide a floor, so to speak, but the part I'm interested in is future capital allocation. I basically view Softbank as a (historically very successful) VC firm, and I'm happy to partner up for the long haul. Maybe this will prove to be a mistake, but I like the odds.

They kind of stopped doing that:

http://www.livemint.com/Companies/rCVHvx2GglnyKdVDhcpkPI/SoftBank-to-shut-down-venture-capital-arm-report.html

I don't really think so. Maybe our definitions of VC are different.

Quote
After shutting its VC unit, SoftBank will invest directly in late stage start-ups,

It seems to me that they stopped investing in early stage startups, but they still make big invests in bigger sized startups.
Title: Re: 9984 - Softbank
Post by: no_free_lunch on August 27, 2015, 07:19:29 AM
I bought this one off of like two hours of research, but the way I see it, a lot of the value isn't necessarily in the big holdings today. Those provide a floor, so to speak, but the part I'm interested in is future capital allocation. I basically view Softbank as a (historically very successful) VC firm, and I'm happy to partner up for the long haul. Maybe this will prove to be a mistake, but I like the odds.

I was in a similar situation, I probably did more like 3 hours of research though :).   The thing at current BABA prices the floor could easily be below current price.   If you look at BABA valuation it could still lose another 50% (not saying it will) if there is concern for it's growth.   Even if it doesn't if sprint were to go into bankruptcy, applying a holding company discount the floor of softbank could be substantially lower than it is today.

I bought in as well for the CEO's capital allocation skills and because with a very high BABA price I felt there was a large buffer or floor if you like.  I just feel like that floor has been pulled out at this point.   If BABA were to tank and SFTBY with it, I would very much like to get back in.
Title: Re: 9984 - Softbank
Post by: ccap on August 27, 2015, 02:11:46 PM
I frequently see comments about how great the Softbank CEO is at capital allocation.  From my brief look at the security, it looks like the returns thus far have been from Alibaba, Yahoo Japan, and the Japanese telco turn around.  All three were lottery ticket scenarios that could have gone either way -- I assume most of the venture investments to date have gone to zero. 

For a CEO that consistently invests in lottery tickets -- and most of his returns have resulted from the lottery tickets -- how do you differentiate between luck and skill?
Title: Re: 9984 - Softbank
Post by: muscleman on August 27, 2015, 05:50:04 PM
I frequently see comments about how great the Softbank CEO is at capital allocation.  From my brief look at the security, it looks like the returns thus far have been from Alibaba, Yahoo Japan, and the Japanese telco turn around.  All three were lottery ticket scenarios that could have gone either way -- I assume most of the venture investments to date have gone to zero. 

For a CEO that consistently invests in lottery tickets -- and most of his returns have resulted from the lottery tickets -- how do you differentiate between luck and skill?

Their presentation says that most of their +1 billion investments have been doing well except RenRen. I think that's probably why they decided to stop investing in very early stage companies. Probably most have gone to zero.
Title: Re: 9984 - Softbank
Post by: ScottHall on August 27, 2015, 06:01:03 PM
I frequently see comments about how great the Softbank CEO is at capital allocation.  From my brief look at the security, it looks like the returns thus far have been from Alibaba, Yahoo Japan, and the Japanese telco turn around.  All three were lottery ticket scenarios that could have gone either way -- I assume most of the venture investments to date have gone to zero. 

For a CEO that consistently invests in lottery tickets -- and most of his returns have resulted from the lottery tickets -- how do you differentiate between luck and skill?

Power laws, aren't they amazing?
Title: Re: 9984 - Softbank
Post by: no_free_lunch on August 27, 2015, 07:06:18 PM
The way I understand it, the CEO is a self made millionaire who then became a self-made billionaire.   This all happened in the 80's & 90's.  During this period, amongst other investments he co-founded Yahoo Japan which is now a $23B company.   By 2000 he built softbank to a company similar in size to that of today (if memory serves) at which point the stock got completely pummeled in the crash.   I think he was down 75%+.    You could count this against him, but holding is just kind of how he operates for the most part.   I don't know, it is what it is, it will be bumpy investing with him.

He continued to invest and made other investments, including BABA.   BABA amongst others was a huge hit.   So he has made money and lost money or numerous occasions.

I think what he accomplished leading up to 2000, that alone would qualify him as more than lucky.  However, if you throw in the gigantic success of Ali Baba I think it's hard to say it's just luck.


Title: Re: 9984 - Softbank
Post by: frank on August 29, 2015, 03:02:27 AM
Sold out of SFTBY at about a 10% loss, however money got put into other positions that are down similar or greater amounts.   BABA is such a large part of the story that it is scary to hold this with what is going on in China and even with the existing decline in BABA, the sftby price makes a lot less sense.  I am also not bullish on Sprint so there is not enough left to justify holding it.

BABA's Taobao and Tmall business will be much larger five years from now regardless of whether China goes into a recession or not as the migration of common folk's everyday purchasing from offline to online is still on-going and well and for many small businesses Taobao is still be the only viable destination to sell to masses across the country.   The thing I would really need to make sure is just what price I pay for the stock and what goes into my valuation equation as I think exchange rate and discretionary income growth rate are now much harder to predict than a year ago.  Also, I think competition is building in the B2C business and it's totally possible that Tmall will lose share in the long run to JD and the likes.

The worst case scenario to me is that Taobao becomes marginalized like eBay by someone like JD.com, so that people only shop for niche goods on Taobao or even Tmall. Now I don't think that will happen, based on what I know about Chinese consumer preferences.

Sold out of SFTBY at about a 10% loss, however money got put into other positions that are down similar or greater amounts.   BABA is such a large part of the story that it is scary to hold this with what is going on in China and even with the existing decline in BABA, the sftby price makes a lot less sense.  I am also not bullish on Sprint so there is not enough left to justify holding it.

BABA's Taobao and Tmall business will be much larger five years from now regardless of whether China goes into a recession or not as the migration of common folk's everyday purchasing from offline to online is still on-going and well and for many small businesses Taobao is still be the only viable destination to sell to masses across the country.   The thing I would really need to make sure is just what price I pay for the stock and what goes into my valuation equation as I think exchange rate and discretionary income growth rate are now much harder to predict than a year ago.  Also, I think competition is building in the B2C business and it's totally possible that Tmall will lose share in the long run to JD and the likes.

The worst case scenario to me is that Taobao becomes marginalized like eBay by someone like JD.com, so that people only shop for niche goods on Taobao or even Tmall. Now I don't think that will happen, based on what I know about Chinese consumer preferences.

Right, this is really the sad thing about China as its brick-and-mortar retail landscape is not as well-developed as the U.S. and H.K. and so Taobao, JD and others have become the better alternative for folks to shop for goods. 

However, the thing I do worry about Taobao is that since it's a regulated marketplace with millions of buyers and sellers, how would you trust somebody who sell you higher-priced items such as a fridge or a smartphone or things that you eat and drink when you can find the same/similar good that you can trust from a reputable seller such as JD or YHD.com (which is now owned by Wal-Mart) for the same price?  Remember, in China, trust means a lot to consumers and I am pretty sure that you would somehow agree if you are there.

So this is why I think Taobao and Tmall will grow with the overall market but it's mkt share will be slowly taken by niche players and those with a more integrated and trusted supply chain.  That being said, I think my concerns are still a few years away from really causing a real dent to BABA's core businesses and probably shouldn't give anyone a pause to purchase BABA at the right price.
Title: Re: 9984 - Softbank
Post by: muscleman on September 10, 2015, 07:58:57 PM
http://www.bloomberg.com/news/articles/2015-09-11/softbank-chairman-said-to-have-considered-taking-company-private

Do you think this is real?
Title: Re: 9984 - Softbank
Post by: phil_Buffett on November 27, 2015, 02:20:27 AM
http://www.economist.com/news/business/21678237-masayoshi-son-has-always-bounced-back-setbacks-his-latest-big-moves-are-raising
Title: Re: 9984 - Softbank
Post by: Jurgis on November 27, 2015, 08:35:13 AM
http://www.economist.com/news/business/21678237-masayoshi-son-has-always-bounced-back-setbacks-his-latest-big-moves-are-raising

Good article from Economist (par for the course - most of their articles are good).
Although Softbank might be cheap based on SoTP, Sprint is a concern and so is Alibaba (to me - others might consider Alibaba great company). New investments are possibly made at inflated prices. Not counting Japanese telecom business, I don't particularly see what Softbank/Son provides. If I compare it to Malone, I see Malone's investments being 1+1 = 3. With Softbank, I see more of 1 + 1 = 1.5 at best... Perhaps I don't have long term view, but I am skeptical.
Title: Re: 9984 - Softbank
Post by: muscleman on November 27, 2015, 01:46:04 PM
http://www.economist.com/news/business/21678237-masayoshi-son-has-always-bounced-back-setbacks-his-latest-big-moves-are-raising

Good article from Economist (par for the course - most of their articles are good).
Although Softbank might be cheap based on SoTP, Sprint is a concern and so is Alibaba (to me - others might consider Alibaba great company). New investments are possibly made at inflated prices. Not counting Japanese telecom business, I don't particularly see what Softbank/Son provides. If I compare it to Malone, I see Malone's investments being 1+1 = 3. With Softbank, I see more of 1 + 1 = 1.5 at best... Perhaps I don't have long term view, but I am skeptical.

The churn rate in Sprint is still dropping. They got more customers signing on postpaid plans each month. They started the sale leaseback deals with MLS which is setup by Softbank. This will relieve their cash stress. I haven't done any projections to see how many more customers they have to have in order to make the high fixed costs viable though. I should dig more into their financials.
Title: Re: 9984 - Softbank
Post by: muscleman on January 25, 2016, 10:13:06 AM
https://www.sec.gov/Archives/edgar/data/101830/999999999715015958/filename1.pdf

Why would softbank ask the court to treat its ownership of Sprint as confidential?
Title: Re: 9984 - Softbank
Post by: fareastwarriors on June 06, 2016, 01:36:40 PM
SoftBank is selling almost all of its shares in games firm GungHo for $685M
http://techcrunch.com/2016/06/06/softbank-is-selling-almost-all-of-its-shares-in-games-firm-gungho-for-685m/ (http://techcrunch.com/2016/06/06/softbank-is-selling-almost-all-of-its-shares-in-games-firm-gungho-for-685m/)


China’s Tencent Seeks to Buy Majority Stake in ‘Clash of Clans’ Maker Supercell
Chinese Internet firm’s discussions with Japan’s SoftBank are still at early stage
http://www.wsj.com/articles/tencent-in-talks-with-softbank-for-majority-stake-in-clash-of-clans-maker-supercell-1463987609 (http://www.wsj.com/articles/tencent-in-talks-with-softbank-for-majority-stake-in-clash-of-clans-maker-supercell-1463987609)
Title: Re: 9984 - Softbank
Post by: Oreo on June 08, 2016, 08:01:14 PM
http://www.economist.com/news/business/21678237-masayoshi-son-has-always-bounced-back-setbacks-his-latest-big-moves-are-raising

Good article from Economist (par for the course - most of their articles are good).
Although Softbank might be cheap based on SoTP, Sprint is a concern and so is Alibaba (to me - others might consider Alibaba great company). New investments are possibly made at inflated prices. Not counting Japanese telecom business, I don't particularly see what Softbank/Son provides. If I compare it to Malone, I see Malone's investments being 1+1 = 3. With Softbank, I see more of 1 + 1 = 1.5 at best... Perhaps I don't have long term view, but I am skeptical.

I've briefly looked at Softbank twice, but I never was able to get over the sense that it is a ticking time bomb.
Title: Re: 9984 - Softbank
Post by: fareastwarriors on July 13, 2016, 04:13:08 PM
SoftBank: Waiting for the next ‘big idea’



Masayoshi Son has cashed in investments and lost his successor — where now for the Japanese group?




http://www.ft.com/cms/s/0/213582f2-453e-11e6-9b66-0712b3873ae1.html#axzz4E9C5mUS1 (http://www.ft.com/cms/s/0/213582f2-453e-11e6-9b66-0712b3873ae1.html#axzz4E9C5mUS1)
Title: Re: 9984 - Softbank
Post by: ajc on July 14, 2016, 04:18:33 AM

SoftBank: Waiting for the next ‘big idea’

Masayoshi Son has cashed in investments and lost his successor — where now for the Japanese group?

http://www.ft.com/cms/s/0/213582f2-453e-11e6-9b66-0712b3873ae1.html#axzz4E9C5mUS1 (http://www.ft.com/cms/s/0/213582f2-453e-11e6-9b66-0712b3873ae1.html#axzz4E9C5mUS1)


It's a decent article and I agree with their take on the stylistic differences between Son and Arora, but some points:

 - The FT reported 2 weeks ago that the sale of those holdings was being done to reduce debt and improve their credit rating, now they're saying it's for an acquisition. Softbank hasn't commented either way.
It also refers to the group as heavily indebted, but at no point notes that Sprint's is consolidated, non-recourse debt.

- Softbank have sold down all their entertainment holdings (Supercell, GungHo, and Legendary), so if you were speculating you might as well guess that an acquisition will be related to ride-sharing (Ola, Grab, and Didi), e-commerce (Coupang, Snapdeal, Grofers, and Tokopedia), robotics (Pepper), or clean energy infrastructure (Softbank Energy and SBG Cleantech). Or, at least discuss Yahoo Japan....

- Finally, if you do any research on Softbank's investments you'd probably name Oyo Rooms, Grab, Ola & Coupang over Snapdeal, Didi & SoFi. Some fundamental analysis on Softbank's ownership stake's, management quality at those businesses, competitive positioning within their industries, and structural factors within the Indian, ASEAN, and Korean economies lends to that conclusion.

I'm a fan of the FT, but I don't think there's much here from a fundamental investment perspective. Sad!


Title: Re: 9984 - Softbank
Post by: frank87 on July 14, 2016, 06:00:36 AM
http://www.economist.com/news/business/21678237-masayoshi-son-has-always-bounced-back-setbacks-his-latest-big-moves-are-raising

Good article from Economist (par for the course - most of their articles are good).
Although Softbank might be cheap based on SoTP, Sprint is a concern and so is Alibaba (to me - others might consider Alibaba great company). New investments are possibly made at inflated prices. Not counting Japanese telecom business, I don't particularly see what Softbank/Son provides. If I compare it to Malone, I see Malone's investments being 1+1 = 3. With Softbank, I see more of 1 + 1 = 1.5 at best... Perhaps I don't have long term view, but I am skeptical.

Just wondering - how do you come to these conclusions?
Title: Re: 9984 - Softbank
Post by: Jurgis on July 14, 2016, 08:06:53 AM
http://www.economist.com/news/business/21678237-masayoshi-son-has-always-bounced-back-setbacks-his-latest-big-moves-are-raising

Good article from Economist (par for the course - most of their articles are good).
Although Softbank might be cheap based on SoTP, Sprint is a concern and so is Alibaba (to me - others might consider Alibaba great company). New investments are possibly made at inflated prices. Not counting Japanese telecom business, I don't particularly see what Softbank/Son provides. If I compare it to Malone, I see Malone's investments being 1+1 = 3. With Softbank, I see more of 1 + 1 = 1.5 at best... Perhaps I don't have long term view, but I am skeptical.

Just wondering - how do you come to these conclusions?

Which conclusions?

Leaving Malone out, here are pros and cons for Softbank:

Pros:
- Son's Japan telecom business (past?)
- Son's investment in a bunch of successful unicorn like companies in the past (Alibaba, Yahoo Japan, etc.)
- Maybe still cheap at SoTP - I did not look recently

Cons:
- Sprint is a mess (still?)
- Alibaba and possibly other old positions are overvalued (arguable, people might think differently)
- New unicorn-like positions are bought at the height of unicorn valuations. I doubt they will work out as well as Alibaba did, but that's just a generic observation. I might be wrong.
- Arora mess (highlighting some thrashing at the top in terms of future strategy)

I will admit that I have not spend much time recently on various pieces of Softbank, so you might have different view of the company and its holdings. If you believe Son is still in top shape and company's progress is fine, then it might be a good investment that will bring good returns. Not for me though.
Title: Re: 9984 - Softbank
Post by: frank87 on July 15, 2016, 08:39:56 AM
http://www.economist.com/news/business/21678237-masayoshi-son-has-always-bounced-back-setbacks-his-latest-big-moves-are-raising

Good article from Economist (par for the course - most of their articles are good).
Although Softbank might be cheap based on SoTP, Sprint is a concern and so is Alibaba (to me - others might consider Alibaba great company). New investments are possibly made at inflated prices. Not counting Japanese telecom business, I don't particularly see what Softbank/Son provides. If I compare it to Malone, I see Malone's investments being 1+1 = 3. With Softbank, I see more of 1 + 1 = 1.5 at best... Perhaps I don't have long term view, but I am skeptical.

Just wondering - how do you come to these conclusions?

Which conclusions?

Leaving Malone out, here are pros and cons for Softbank:

Pros:
- Son's Japan telecom business (past?)
- Son's investment in a bunch of successful unicorn like companies in the past (Alibaba, Yahoo Japan, etc.)
- Maybe still cheap at SoTP - I did not look recently

Cons:
- Sprint is a mess (still?)
- Alibaba and possibly other old positions are overvalued (arguable, people might think differently)
- New unicorn-like positions are bought at the height of unicorn valuations. I doubt they will work out as well as Alibaba did, but that's just a generic observation. I might be wrong.
- Arora mess (highlighting some thrashing at the top in terms of future strategy)

I will admit that I have not spend much time recently on various pieces of Softbank, so you might have different view of the company and its holdings. If you believe Son is still in top shape and company's progress is fine, then it might be a good investment that will bring good returns. Not for me though.

I was just wondering about your rationale. Malone and Son have very, very different approaches. Softbank is more of a venture capital type company than any of Malone's companies. What may seem like pricey acquisitions may in due time turn out to be incredible winners - or more likely they will be duds. But the thing about VC is that you only need a handful of big wins to have a great track record. At the very least, Son has that so far.

As far as what the future may behold, no conclusions can be drawn. At the very least, the stock appears to be fairly undervalued at this current point in time.

Also, I have no position in Alibaba but if forced to choose, I would definitely NOT be betting against it.
Title: Re: 9984 - Softbank
Post by: Jurgis on July 15, 2016, 09:31:28 AM
I was just wondering about your rationale. Malone and Son have very, very different approaches. Softbank is more of a venture capital type company than any of Malone's companies.

I'm gonna end this discussion since I really don't know Softbank too much and I don't have time or inclination to dig deeper, but I disagree with the above. Softbank's Japan telco business and Sprint is very similar to Malone's businesses. With these being a big chunk of Softbank IMHO you can't call it VC business since a large part of your returns are not coming from VC. Even the Alibaba and Yahoo Japan holdings are arguably no longer VC-like business since the companies are huge and it's not very VC like to have large parts of capital in huge public companies. I could also argue that Malone also holds positions in Trip Advisor, Expedia and a bunch of startupy companies. But anyway, I don't care. Have fun and good luck. :)
Title: Re: 9984 - Softbank
Post by: Foreign Tuffett on July 15, 2016, 08:02:05 PM
I have a tremendous amount of respect for Masayoshi Son. However, the Nikesh Arora situation was a complete debacle.   

Anyone long Softbank should make sure they are comfortable with Alibaba and why the short case is wrong.
Title: Re: 9984 - Softbank
Post by: fareastwarriors on July 18, 2016, 08:23:36 AM
Japan’s Softbank to buy chip-design powerhouse ARM for $32 billion

http://www.cnbc.com/2016/07/17/ (http://www.cnbc.com/2016/07/17/)
Title: Re: 9984 - Softbank
Post by: rogermunibond on July 18, 2016, 08:57:20 AM
Maybe the company needs a new moniker too.  Like Hardbank.
Title: Re: 9984 - Softbank
Post by: Jurgis on July 18, 2016, 10:20:37 AM
Wow.

On one hand, I like this better than a lot of money losing unicorns.

On the other hand, the price is high, the business is competitive even with all ARM moat.

Moat is there though it has to be carefully managed.

I'll repeat myself  8) but this one of my big mistakes of omission in the past: not buying and holding tons of ARM in 2003 or so. Bought some, sold at minor gain or wash. Stupid me.

They should have bought ARM years ago. At least instead of Sprint.
Title: Re: 9984 - Softbank
Post by: Wilson-TPC on July 19, 2016, 12:56:12 AM
Would someone be so kind as to share the latest SOTP analysis on this name?

Thank you very much in advance!
Title: Re: 9984 - Softbank
Post by: ccplz on July 19, 2016, 03:46:37 AM
Before Transaction

28% of Alibaba: 57b
43% of Yahoo JP: 11b
Total Investment Assets: >68b

Operational Assets
80% of Sprint: 16b
Core Business: 6.61 EBIT x10=66b
Total Operational Assets: 82b

Cash from end of FY 2015: ~24b
Cash from Gungho/Alibaba/Supercell sales: 21b
Total Cash: 45b

Value of Assets: 195b
Debt: 89b
Value of equity: 106b USD
Title: Re: 9984 - Softbank
Post by: fareastwarriors on January 03, 2017, 09:42:26 AM
Qualcomm to Invest in SoftBank’s New Technology Fund

SoftBank Vision Fund is expected to reach its $100 billion goal

http://www.wsj.com/articles/qualcomm-to-invest-in-softbanks-new-technology-fund-1483455690 (http://www.wsj.com/articles/qualcomm-to-invest-in-softbanks-new-technology-fund-1483455690)
Title: Re: 9984 - Softbank
Post by: fareastwarriors on February 14, 2017, 04:34:32 PM
Did not see this coming....



SoftBank to buy Fortress Investment for $3.3 billion
http://www.reuters.com/article/us-fortress-inv-glo-m-a-softbank-group-idUSKBN15T333 (http://www.reuters.com/article/us-fortress-inv-glo-m-a-softbank-group-idUSKBN15T333)
Title: Re: 9984 - Softbank
Post by: villainx on February 14, 2017, 06:52:22 PM
Me too. Son is very unpredictable, but SoftBank transformation has been ongoing for awhile, any thoughts of historic precedent, I'm thinking of LUK a bit, but Fortress is ... something different.
Title: Re: 9984 - Softbank
Post by: mhdousa on February 15, 2017, 06:52:35 AM
Denali Investor presentation on Softbank:
https://drive.google.com/file/d/0B7gFFwwDJPZYcm5weUJLc1ExR0U/view

Transcript of presentation:
https://drive.google.com/file/d/0B7gFFwwDJPZYWlNrU3VDeWgzM3M/view

Title: Re: 9984 - Softbank
Post by: ajc on February 15, 2017, 04:29:48 PM

Denali Investor presentation on Softbank:
https://drive.google.com/file/d/0B7gFFwwDJPZYcm5weUJLc1ExR0U/view

Transcript of presentation:
https://drive.google.com/file/d/0B7gFFwwDJPZYWlNrU3VDeWgzM3M/view


I would've liked some deeper discussion about Cainiao and PayTM for Alibaba. As well as Coupang, Grab, Oyo, and Freecharge on the Softbank side.

For example, Cainiao delivers twice as many packages as UPS per day and Alibaba are opening the service up to do parcel logistics for anyone. UPS has a market cap of $100B. Not an apples to apples comparison, but worth considering. Same goes for those other names.

Anyway, it was an interesting read. Some of the points, especially about Son's media image versus his actual approach to debt, were very insightful.

Thanks.


Title: Re: 9984 - Softbank
Post by: giofranchi on February 16, 2017, 12:22:20 AM
Denali Investor presentation on Softbank:
https://drive.google.com/file/d/0B7gFFwwDJPZYcm5weUJLc1ExR0U/view

Transcript of presentation:
https://drive.google.com/file/d/0B7gFFwwDJPZYWlNrU3VDeWgzM3M/view

Thank you for posting! Very interesting presentation!

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: giofranchi on February 18, 2017, 06:52:57 AM
I have opened a relatively small position in SoftBank.
I think of it as a "technology index fund of the East". And it is the best way imo to get a piece of both Alibaba and ARM, two great companies.
Compared to a SOTP valuation its share price is still very cheap.
Of course, there is the debt issue: but much of it is in Sprint and Sprint is starting to make a positive EBIT and it will probably grow and improve it from now on. Second, there is SoftBank's public stocks portfolio, which is about the same size of its debt. Therefore, Masayoshi Son says that SoftBank is effectively net debt zero.

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: abyli on February 18, 2017, 07:14:51 AM
I have opened a relatively small position in SoftBank.
I think of it as a "technology index fund of the East". And it is the best way imo to get a piece of both Alibaba and ARM, two great companies.
Compared to a SOTP valuation its share price is still very cheap.
Of course, there is the debt issue: but much of it is in Sprint and Sprint is starting to make a positive EBIT and it will probably grow and improve it from now on. Second, there is SoftBank's public stocks portfolio, which is about the same size of its debt. Therefore, Masayoshi Son says that SoftBank is effectively net debt zero.

Cheers,

Gio
Why not just buy baba stock then?
Title: Re: 9984 - Softbank
Post by: ajc on February 18, 2017, 08:19:43 AM


Why not just buy baba stock then?



I can't speak for Giofranchi, but if you take the view that BABA is trading at something of a discount given the growth prospects for its core retail business as well as Alipay, Cainiao, and their stakes in Didi, PayTM, etc then any movement of its stock price towards a fairer value will have an outsize impact on Softbank because of the far bigger effective discount that Softbank's BABA stock is trading at.

This assumes an investor trusts management's ability to allocate capital intelligently, but Son tends to do that more often than not. Recently, there have been substantial share buybacks at a big discount and the supposedly terrible Sprint investment is in the black on a currency-adjusted basis while the turnaround continues to go well.

Before the ARM purchase, Softbank liquidated about $8B worth of BABA stock. If they continue to liquidate BABA stock every few years, then all things being equal, it will have a far higher economic value for SFTBY shareholders than it would for an ordinary BABA shareholder who was liquidating their position.


Title: Re: 9984 - Softbank
Post by: giofranchi on February 19, 2017, 02:50:10 AM
Why not just buy baba stock then?

Probably because I have no strongly held views in technology. I prefer to have exposure to BABA, ARM, and a myriad of other businesses, than to have exposure to BABA alone. In other words I prefer a basket approach. Is SoftBank a sort of basket in technology put together by Masa Son? If so, that's fine with me!
While reading "Alibaba - The House That Jack Ma Built", I have found what Jack Ma has said about Masa Son to be very interesting. Please, find it in attachment.

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: ccplz on February 19, 2017, 04:07:56 AM
Guess it's time to start shorting Softbank then.
Title: Re: 9984 - Softbank
Post by: giofranchi on February 19, 2017, 05:09:05 AM
Guess it's time to start shorting Softbank then.

I am not sure I understand... Why do you say so?

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: plato1976 on February 19, 2017, 10:08:37 AM
yes, maybe not outright short, but at least to be cautious at this point......

Guess it's time to start shorting Softbank then.
Title: Re: 9984 - Softbank
Post by: giofranchi on February 19, 2017, 11:18:50 AM
yes, maybe not outright short, but at least to be cautious at this point......

Guess it's time to start shorting Softbank then.

Why now?
It seems to me that SoftBank has never been on a sounder footing since the acquisition of Sprint.
There are also new rumors a merger between T-Mobile and Sprint might come soon:
http://www.cnbc.com/2017/02/17/softbank-eyes-sprint-t-mobile-deals.html
And Sprint has finally started generating some positive FCF and is still improving.
Meanwhile, SoftBank remains very cheap on a SOTP basis.
Am I wrong?

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: Picasso on February 19, 2017, 11:43:22 AM
yes, maybe not outright short, but at least to be cautious at this point......

Guess it's time to start shorting Softbank then.

Maybe lighten up on a long just in case.
Title: Re: 9984 - Softbank
Post by: giofranchi on February 19, 2017, 11:50:35 AM
yes, maybe not outright short, but at least to be cautious at this point......

Guess it's time to start shorting Softbank then.

Maybe lighten up on a long just in case.

Dennis,
You see serious issues here at this point? If so, would you mind sharing them?

Thank you!

Gio
Title: Re: 9984 - Softbank
Post by: Picasso on February 19, 2017, 12:15:05 PM
Hey Gio,

I actually sort of agree with you, if they can somehow merge S with TMUS then it's probably safe to assume that the investment is no longer a zero.  Most SoftBank investors were marking that down to zero or shorting out S to get comfortable with the SOTP.

But SOTP is probably not the right way to value SoftBank.  It's a super levered equity stub that seems to always trade at a low multiple of earnings.  I don't buy into the whole "our public holdings offset the debt so we're not levered."  A lot of Masa's decisions are highly unusual and in many cases just bizarre. 

I also wonder what BABA is really worth.  I get some super shady vibes out of management at that company...

Sorry, I don't have a real view on this.  Used to own shares, don't anymore.  Seems like it can be a home run from here or a total disaster.
Title: Re: 9984 - Softbank
Post by: ScottHall on February 19, 2017, 12:34:16 PM
You guys just need to have the Gambler's Instinct. When I bought my SFTBY shares after I found out about the co., I didn't short out any Sprint to offset my exposure. My shares tanked something like 50% before coming back to where they are today, which is up 30% from my purchase and has beaten the market.

I think all this smarty pants stuff about shorting out exposures to create stubs is unnecessary, confusing, and probably not that helpful. If you're investing in a controlled company like this one is, you'd better be comfortable with management's strategy because due to path dependence, future deals may end up helping shape the outcome of previous ones.

I'm in with Masa and will ride this sucker to $0 if that's where it's going... I think he's way too interesting of a character not to participate in whatever the hell his mind comes up with.
Title: Re: 9984 - Softbank
Post by: giofranchi on February 19, 2017, 12:40:17 PM
Hey Gio,

I actually sort of agree with you, if they can somehow merge S with TMUS then it's probably safe to assume that the investment is no longer a zero.  Most SoftBank investors were marking that down to zero or shorting out S to get comfortable with the SOTP.

But SOTP is probably not the right way to value SoftBank.  It's a super levered equity stub that seems to always trade at a low multiple of earnings.  I don't buy into the whole "our public holdings offset the debt so we're not levered."  A lot of Masa's decisions are highly unusual and in many cases just bizarre. 

I also wonder what BABA is really worth.  I get some super shady vibes out of management at that company...

Sorry, I don't have a real view on this.  Used to own shares, don't anymore.  Seems like it can be a home run from here or a total disaster.

Thank you Dennis!
Your point of view is always very useful.
Why do you believe a SOTP analysis is not the right way to value the company?
For me it is a small position anyway: if it turns out right, very well then. Otherwise, I am not risking much.

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: giofranchi on February 19, 2017, 12:49:35 PM
You guys just need to have the Gambler's Instinct. When I bought my SFTBY shares after I found out about the co., I didn't short out any Sprint to offset my exposure. My shares tanked something like 50% before coming back to where they are today, which is up 30% from my purchase and has beaten the market.

I think all this smarty pants stuff about shorting out exposures to create stubs is unnecessary, confusing, and probably not that helpful. If you're investing in a controlled company like this one is, you'd better be comfortable with management's strategy because due to path dependence, future deals may end up helping shape the outcome of previous ones.

I'm in with Masa and will ride this sucker to $0 if that's where it's going... I think he's way too interesting of a character not to participate in whatever the hell his mind comes up with.

Thank you for your perspective, Scott!
Always very useful.

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: Picasso on February 19, 2017, 12:53:39 PM
I don't like SOTP here because Masa is borrowing at something like 2% to buy assets compounding 20-30%.  You can say it trades for some 30% discount to a fully-taxed NAV but NAV could easily jump 20-30% next year and so what if it trades at that NAV?  You can't just sell it because it might continue to compound some crazy NAV.  So if it works out you'll always be thinking you have some fully valued stock even though it might be earning $20 billion of underlying earnings in several years.  The underlying earnings are constantly being reinvested in all kinds of crazy situations (like S or BABA purchases or some $100 billion hedge fund) making it too hard to keep calculating a SOTP.

Plus I think there is some chance that BABA blows up  Why else would they sell any of their position?  It always seemed so against them to part with any of it.  The Arora situation was simply bizarre (I guess he spearheaded the effort to sell down that stake as well as Supercell?).

I'd rather just figure out what the underlying earnings are behind all the business segments, throw some 10x multiple as "normal" and assume it will always be a 10x business because he'll be levered up his eyeballs until the end of time.  Then it's just a matter of looking at how earnings will grow and that's a hard question to answer... I'd probably still own shares if I hadn't found something more to my liking.
Title: Re: 9984 - Softbank
Post by: giofranchi on February 19, 2017, 01:48:03 PM
I don't like SOTP here because Masa is borrowing at something like 2% to buy assets compounding 20-30%.  You can say it trades for some 30% discount to a fully-taxed NAV but NAV could easily jump 20-30% next year and so what if it trades at that NAV?  You can't just sell it because it might continue to compound some crazy NAV.  So if it works out you'll always be thinking you have some fully valued stock even though it might be earning $20 billion of underlying earnings in several years.  The underlying earnings are constantly being reinvested in all kinds of crazy situations (like S or BABA purchases or some $100 billion hedge fund) making it too hard to keep calculating a SOTP.

Plus I think there is some chance that BABA blows up  Why else would they sell any of their position?  It always seemed so against them to part with any of it.  The Arora situation was simply bizarre (I guess he spearheaded the effort to sell down that stake as well as Supercell?).

I'd rather just figure out what the underlying earnings are behind all the business segments, throw some 10x multiple as "normal" and assume it will always be a 10x business because he'll be levered up his eyeballs until the end of time.  Then it's just a matter of looking at how earnings will grow and that's a hard question to answer... I'd probably still own shares if I hadn't found something more to my liking.

Thank you again!

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: awindenberger on February 19, 2017, 02:36:43 PM
I don't like SOTP here because Masa is borrowing at something like 2% to buy assets compounding 20-30%.  You can say it trades for some 30% discount to a fully-taxed NAV but NAV could easily jump 20-30% next year and so what if it trades at that NAV?  You can't just sell it because it might continue to compound some crazy NAV.  So if it works out you'll always be thinking you have some fully valued stock even though it might be earning $20 billion of underlying earnings in several years.  The underlying earnings are constantly being reinvested in all kinds of crazy situations (like S or BABA purchases or some $100 billion hedge fund) making it too hard to keep calculating a SOTP.

Plus I think there is some chance that BABA blows up  Why else would they sell any of their position?  It always seemed so against them to part with any of it.  The Arora situation was simply bizarre (I guess he spearheaded the effort to sell down that stake as well as Supercell?).

I'd rather just figure out what the underlying earnings are behind all the business segments, throw some 10x multiple as "normal" and assume it will always be a 10x business because he'll be levered up his eyeballs until the end of time.  Then it's just a matter of looking at how earnings will grow and that's a hard question to answer... I'd probably still own shares if I hadn't found something more to my liking.

It's very interesting going through your thinking here Picasso.

On one hand you see the 20-30% long term compounding going on, but then on the other you see the potential for an Alibaba blowup. I guess maybe when FELP finishes playing out you'll need a new investment again.
Title: Re: 9984 - Softbank
Post by: abyli on February 19, 2017, 03:12:41 PM
I don't like SOTP here because Masa is borrowing at something like 2% to buy assets compounding 20-30%.  You can say it trades for some 30% discount to a fully-taxed NAV but NAV could easily jump 20-30% next year and so what if it trades at that NAV?  You can't just sell it because it might continue to compound some crazy NAV.  So if it works out you'll always be thinking you have some fully valued stock even though it might be earning $20 billion of underlying earnings in several years.  The underlying earnings are constantly being reinvested in all kinds of crazy situations (like S or BABA purchases or some $100 billion hedge fund) making it too hard to keep calculating a SOTP.

Plus I think there is some chance that BABA blows up  Why else would they sell any of their position?  It always seemed so against them to part with any of it.  The Arora situation was simply bizarre (I guess he spearheaded the effort to sell down that stake as well as Supercell?).

I'd rather just figure out what the underlying earnings are behind all the business segments, throw some 10x multiple as "normal" and assume it will always be a 10x business because he'll be levered up his eyeballs until the end of time.  Then it's just a matter of looking at how earnings will grow and that's a hard question to answer... I'd probably still own shares if I hadn't found something more to my liking.

I am curious to know why you think BABA might blow up. Can you explain a little bit more? Are you Chinese?

Thanks.
Title: Re: 9984 - Softbank
Post by: villainx on February 19, 2017, 06:57:16 PM
I wonder if BABA was sold as a favor to Jack Ma or Alibaba.  Just not to constantly have it being owned by other entities.  Which might also lessen Alibaba doing structural maneuvers to get out of those entities (SoftBank and Yahoo).

I can see why SoftBank sold just to get liquidity or lock in gains, but yeah, it seems out of character.
Title: Re: 9984 - Softbank
Post by: giofranchi on February 20, 2017, 12:37:07 AM
Half their debt is in Sprint. Therefore, if Masa Son is successful in engineering a merger of Sprint with T-Mobile, their debt could be practically cut in half. From a Net Debt EBITDA Multiple of 4.4 to a Multiple of 2.2, which I think should be easily manageable.
Am I wrong?

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: writser on February 20, 2017, 01:53:01 AM
You could be right but I don't think that you are asking yourself the most important question. Sure, if everything goes according to the latest rumors Softbank will be fine. But what are the chances of that happening? And what happens if something goes wrong along the way?

According to Masa, if I am broke and borrow a million to invest in the Nasdaq I am debt-free: my stock portfolio cancels out my debt. What he conveniently doesn't mention is that I would be leveraged to the hilt: if Google reports a bad quarter I am bankrupt. I look at the latest Softbank quarterly and I see ~14t in tangible assets, ~22t in liabilities and ~3t in equity. Mike Pearson would be proud.
Title: Re: 9984 - Softbank
Post by: giofranchi on February 20, 2017, 03:11:59 AM
According to Masa, if I am broke and borrow a million to invest in the Nasdaq I am debt-free: my stock portfolio cancels out my debt. What he conveniently doesn't mention is that I would be leveraged to the hilt: if Google reports a bad quarter I am bankrupt.

In your case the SOTP would be zero: Stocks worth $1 million - $1 million of debt = $0.
In the SOTP made by Delani Investors, instead, we have: Value of operating businesses - debt = $74 per share (already > $0) + value of investment assets = $152.
Interests on Softbank's debt are serviced by the EBIT of their operating businesses, and on top of that there is the value of their stocks portfolio.
What's wrong with that? When I ask for a loan, my bank looks at my income and on top of that at two other things: the value of my real estate and the value of my stocks portfolio.

Mike Pearson would be proud.
I see at least two differences:
1) SoftBank has made nearly $6 billion of earnings in 2016, and is selling at a reasonable 14x multiple: VRX had almost no GAAP earnings.
2) Masa Son has a much longer track record than Pearson and has already survived a terrible crash when the dotcom bubble burst.

Anyway, I agree: SoftBank is a risky investment and therefore it remains a small percentage of my equity investments. If everything goes according to what Masa Son is planning and saying, it will add to my returns meaningfully. If things go wrong instead, I am not risking much.

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: ccplz on February 20, 2017, 05:12:29 PM
According to Masa, if I am broke and borrow a million to invest in the Nasdaq I am debt-free: my stock portfolio cancels out my debt. What he conveniently doesn't mention is that I would be leveraged to the hilt: if Google reports a bad quarter I am bankrupt.

In your case the SOTP would be zero: Stocks worth $1 million - $1 million of debt = $0.
In the SOTP made by Delani Investors, instead, we have: Value of operating businesses - debt = $74 per share (already > $0) + value of investment assets = $152.
Interests on Softbank's debt are serviced by the EBIT of their operating businesses, and on top of that there is the value of their stocks portfolio.
What's wrong with that? When I ask for a loan, my bank looks at my income and on top of that at two other things: the value of my real estate and the value of my stocks portfolio.

Mike Pearson would be proud.
I see at least two differences:
1) SoftBank has made nearly $6 billion of earnings in 2016, and is selling at a reasonable 14x multiple: VRX had almost no GAAP earnings.
2) Masa Son has a much longer track record than Pearson and has already survived a terrible crash when the dotcom bubble burst.

Anyway, I agree: SoftBank is a risky investment and therefore it remains a small percentage of my equity investments. If everything goes according to what Masa Son is planning and saying, it will add to my returns meaningfully. If things go wrong instead, I am not risking much.

Cheers,

Gio

Weren't you a huge fan of Mike at some point
Title: Re: 9984 - Softbank
Post by: giofranchi on February 21, 2017, 12:43:46 AM
Weren't you a huge fan of Mike at some point

I was and I was wrong. We all learn from our mistakes.
And I don't think my investment in Softbank contradicts the four basic lessons I have learnt from the VRX experience:

1) It is very difficult to judge a business that grows revenue through acquisitions using debt.
Of course, I am not against acquisitions: I still think an operator who is both a good entrepreneur and a good investor is preferable to one who is only either a good entrepreneur or a good investor. And I still think a business that can grow both organically and through acquisitions is preferable to a business that grows only organically.
Yet, a business must show solid and growing net earnings to reinvest in acquisitions. As I have said, Masa Son already has nearly $6 billion of net earnings that he must park somewhere each year, and now that Sprint is becoming FCF positive those net earnings will probably increase.
Therefore, I don't think my investment in Softbank contradicts lesson n.1.

2) Valuation must be fair on a GAAP basis. Prices that seem fair only when compared to non-GAAP metrics, while looking astronomical on a GAAP basis, are fraught with dangers.
The price of Softbank stock today goes from fairly valued, if you just put a multiple on the earnings of its operating businesses, to clearly undervalued, if you use a SOTP analysis considering the value of its investment assets too.
Therefore, I don't think my investment in SoftBank contradicts lesson n.2.

3) A manager should be proven in both good times and bad times. He/She must have a long enough track record to have successfully survived tough times.
Masa Son is at the helm of SoftBank since the mid '90s, has survived both the dotcom bubble burst (life threatening for a tech company) and the financial crisis of '08.
Therefore, I don't think my investment in SoftBank contradicts lesson n.3.

4) The proverbial "fat pitch" is very rare: generally, don't invest too much in any single company, but keep a reasonably diversified portfolio of stocks.
Our good friend ScottHall, and one of the best investor I know, was invested in VRX at the same time I was... If I remember correctly... Nonetheless his stock portfolio returned 20%+ in 2015! He wisely chose to hold a reasonably diversified portfolio of stocks.
As I have said, SoftBank is a small percentage of my portfolio: enough to give an interesting boost to my future returns, if everything goes according to Masa Son's plans, while still not risking much, if something goes wrong instead.
Therefore, I don't think my investment in SoftBank contradicts lesson n.4.

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: ScottHall on February 21, 2017, 01:24:31 AM
Weren't you a huge fan of Mike at some point

I was and I was wrong. We all learn from our mistakes.
And I don't think my investment in Softbank contradicts the four basic lessons I have learnt from the VRX experience:

1) It is very difficult to judge a business that grows revenue through acquisitions using debt.
Of course, I am not against acquisitions: I still think an operator who is both a good entrepreneur and a good investor is preferable to one who is only either a good entrepreneur or a good investor. And I still think a business that can grow both organically and through acquisitions is preferable to a business that grows only organically.
Yet, a business must show solid and growing net earnings to reinvest in acquisitions. As I have said, Masa Son already has nearly $6 billion of net earnings that he must park somewhere each year, and now that Sprint is becoming FCF positive those net earnings will probably increase.
Therefore, I don't think my investment in Softbank contradicts lesson n.1.

2) Valuation must be fair on a GAAP basis. Prices that seem fair only when compared to non-GAAP metrics, while looking astronomical on a GAAP basis, are fraught with dangers.
The price of Softbank stock today goes from fairly valued, if you just put a multiple on the earnings of its operating businesses, to clearly undervalued, if you use a SOTP analysis considering the value of its investment assets too.
Therefore, I don't think my investment in SoftBank contradicts lesson n.2.

3) A manager should be proven in both good times and bad times. He/She must have a long enough track record to have successfully survived tough times.
Masa Son is at the helm of SoftBank since the mid '90s, has survived both the dotcom bubble burst (life threatening for a tech company) and the financial crisis of '08.
Therefore, I don't think my investment in SoftBank contradicts lesson n.3.

4) The proverbial "fat pitch" is very rare: generally, don't invest too much in any single company, but keep a reasonably diversified portfolio of stocks.
Our good friend ScottHall, and one of the best investor I know, was invested in VRX at the same time I was... If I remember correctly... Nonetheless his stock portfolio returned 20%+ in 2015! He wisely chose to hold a reasonably diversified portfolio of stocks.
As I have said, SoftBank is a small percentage of my portfolio: enough to give an interesting boost to my future returns, if everything goes according to Masa Son's plans, while still not risking much, if something goes wrong instead.
Therefore, I don't think my investment in SoftBank contradicts lesson n.4.

Cheers,

Gio

Ccplz is just being an asshole, Gio. I for one appreciate your contribution to the forums.
Title: Re: 9984 - Softbank
Post by: CONeal on June 09, 2017, 07:59:41 AM
Acquired Boston Dynamics

https://www.washingtonpost.com/news/innovations/wp/2017/06/09/remember-that-terrifying-robot-cheetah-its-getting-a-new-owner/?utm_term=.b5ad1c2f0fc4



Title: Re: 9984 - Softbank
Post by: james22 on October 26, 2017, 02:15:35 AM
Chris Lane thinks investors haven’t quite gotten their heads around what Masayoshi Son is trying to do at SoftBank Group Corp.

The Sanford C. Bernstein analyst just initiated coverage of the Japanese company with an “outperform” rating and a forecast that shares could rally 36 percent over the next year. Investors still see SoftBank as primarily a telecommunications company, he says, even though its core business is investing in technology.

There are similarities to Berkshire Hathaway Inc., the U.S. company led by Warren Buffett, he explains. While Berkshire uses cash from its insurance business to invest in railroads, ice cream shops and Coca-Cola, SoftBank taps cash from its telecoms operations to back startups in ride-hailing, artificial intelligence, e-commerce and robots. Yet SoftBank trades at a discount of more than 40 percent to the assets it owns, while Berkshire has little or no such markdown.

“The discount is ridiculous,” Lane said in an interview after his report was published. “What’s unusual about SoftBank is that there’s a 40 percent discount across the group.”

Conglomerates tend to trade at lower values than their individual assets, but SoftBank’s is particularly deep. Lane contends that businesses it controls completely, like the Japanese telecom operations, shouldn’t be valued lower than their market value. He estimates the sum of SoftBank’s parts have an enterprise value of 31.7 trillion yen ($280 billion), or 18.3 trillion yen after subtracting debt. Its market cap is about 11 trillion yen.


https://www.bloomberg.com/news/articles/2017-10-20/softbank-seen-climbing-36-percent-as-son-clarifies-tech-vision
Title: Re: 9984 - Softbank
Post by: Jurgis on October 26, 2017, 07:47:55 AM
People seriously investing in Softbank should probably understand Vision fund and leverage. http://www.siliconinvestor.com/readmsg.aspx?msgid=31318261
Title: Re: 9984 - Softbank
Post by: giofranchi on October 26, 2017, 08:05:38 AM
People seriously investing in Softbank should probably understand Vision fund and leverage. http://www.siliconinvestor.com/readmsg.aspx?msgid=31318261

Thank you for posting this!

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: ajc on October 26, 2017, 11:36:00 PM


https://www.bloomberg.com/news/articles/2017-10-20/softbank-seen-climbing-36-percent-as-son-clarifies-tech-vision



https://www.youtube.com/watch?v=Sa2_VBu0d7k&t=1035s (https://www.youtube.com/watch?v=Sa2_VBu0d7k&t=1035s)

At around 17 minutes in, I think Son is saying ARM has a ton of pricing power and he intends to use it. He might be talking about scaling up sales via the IOT, but it doesn't sound like it.
Makes sense to me given the royalty costs versus the importance of the chip. If the price increases along with scaling do happen, the returns could be very impressive. He argues ARM alone could have Alphabet's market cap.
Otherwise, I agree SFTBY is substantially undervalued.

Also, I think their stakes in OYO Rooms, Grab, and Didi are underappreciated. I have Softbank owning 42%, 55%, and 17% respectively. That's just the company and doesn't include any Vision Fund stakes.
The Didi stake alone could be worth well over $20B at the IPO.
Softbank also owns between 30% and 40% of Ola. That might be worth a similar amount.


Title: Re: 9984 - Softbank
Post by: fareastwarriors on January 02, 2018, 08:53:15 AM
Inside the Eccentric, Relentless Deal-Making of Masayoshi Son

The Japanese billionaire has changed the startup game with his aggressive investing and enormous checkbook. Does he know what he’s doing?

https://www.bloomberg.com/news/features/2018-01-02/inside-the-eccentric-unstoppable-deal-making-of-masayoshi-son (https://www.bloomberg.com/news/features/2018-01-02/inside-the-eccentric-unstoppable-deal-making-of-masayoshi-son)
Title: Re: 9984 - Softbank
Post by: aalexa1225 on January 03, 2018, 04:52:46 PM
Gio, care the share you most up to date analysis of the SOTP value?

AOA
Title: Re: 9984 - Softbank
Post by: giofranchi on January 04, 2018, 01:46:00 AM
Gio, care the share you most up to date analysis of the SOTP value?

AOA

From the article recently posted:

Quote
Lane sees clear evidence of that disbelief: SoftBank’s stock in Alibaba and other assets are worth more than 19 trillion yen after subtracting all its debt, but SoftBank’s market cap is only 9.8 trillion yen.

SoftBank is only one position in a diversified portfolio for me. And it is a bet on the sharing economy and the IoT. If both will become huge, SoftBank should benefit. Otherwise, I don’t expect much.

Cheers,

Gio
Title: Re: 9984 - Softbank
Post by: ccplz on January 31, 2018, 02:15:49 AM
https://www.bloomberg.com/news/articles/2018-01-30/softbank-invests-300-million-into-dog-walking-startup-wag

What a legend
Title: Re: 9984 - Softbank
Post by: DooDiligence on January 31, 2018, 05:19:35 AM
https://www.bloomberg.com/news/articles/2018-01-30/softbank-invests-300-million-into-dog-walking-startup-wag

What a legend

I'm confused by this one too, but I don't own a dog.

---

On another note:

"Then there was the time in 2001, when Mr. Son threatened to set himself on fire in the offices of the ministry unless an official prodded telecom giant Nippon Telegraph & Telephone to lease optical-fiber lines to SoftBank, for a broadband network it was building."

https://blogs.wsj.com/japanrealtime/2013/12/14/why-regulators-dont-scare-softbanks-masayoshi-son/
Title: Re: 9984 - Softbank
Post by: ajc on May 01, 2018, 03:48:36 PM

So far, Commerce Secretary Wilbur Ross and ex-FCC Chief of Staff Adonis Hoffman, seem to think the TMUS/S merger is good on balance and should happen.
Who knows how good CNBC's Charlie Gasparino's contacts are, but he's spoken to people in the DOJ anti-trust division, and they say the merger would be fine with conditions attached (presumably pricing and job protections).

It also sounds like the 5G consumer pitch, as well as the need for the US to be competitive globally, is a good one. There's reason to think the new T-Mobile will continue lowering prices and adding new jobs, so my guess is they'd agree to have those specifications included as conditions for a number of years, as they build out the 5G network.

I'm biased, but right now there seems to be a reasonable chance this goes through. It'd almost definitely be a great thing for Softbank stock to get that debt off their books. Also, the Japanese mobile unit spin-off, scheduled for this year, seems like another noteable positive.


Title: Re: 9984 - Softbank
Post by: Spekulatius on May 01, 2018, 04:11:32 PM
https://www.bloomberg.com/news/articles/2018-01-30/softbank-invests-300-million-into-dog-walking-startup-wag

What a legend

I'm confused by this one too, but I don't own a dog.

---

On another note:

"Then there was the time in 2001, when Mr. Son threatened to set himself on fire in the offices of the ministry unless an official prodded telecom giant Nippon Telegraph & Telephone to lease optical-fiber lines to SoftBank, for a broadband network it was building."

https://blogs.wsj.com/japanrealtime/2013/12/14/why-regulators-dont-scare-softbanks-masayoshi-son/

You never own a dog, the dog owns you. Most humans just haven’t it figured out yet.
Title: Re: 9984 - Softbank
Post by: Jurgis on May 02, 2018, 08:12:46 AM
https://www.bloomberg.com/news/articles/2018-01-30/softbank-invests-300-million-into-dog-walking-startup-wag

What a legend

I'm confused by this one too, but I don't own a dog.

---

On another note:

"Then there was the time in 2001, when Mr. Son threatened to set himself on fire in the offices of the ministry unless an official prodded telecom giant Nippon Telegraph & Telephone to lease optical-fiber lines to SoftBank, for a broadband network it was building."

https://blogs.wsj.com/japanrealtime/2013/12/14/why-regulators-dont-scare-softbanks-masayoshi-son/

You never own a dog, the dog owns you. Most humans just haven’t it figured out yet.

I thought this was only true with cats.  8)
Title: Re: 9984 - Softbank
Post by: DooDiligence on May 04, 2018, 09:32:35 AM
https://www.bloomberg.com/news/articles/2018-01-30/softbank-invests-300-million-into-dog-walking-startup-wag

What a legend

I'm confused by this one too, but I don't own a dog.

---

On another note:

"Then there was the time in 2001, when Mr. Son threatened to set himself on fire in the offices of the ministry unless an official prodded telecom giant Nippon Telegraph & Telephone to lease optical-fiber lines to SoftBank, for a broadband network it was building."

https://blogs.wsj.com/japanrealtime/2013/12/14/why-regulators-dont-scare-softbanks-masayoshi-son/

You never own a dog, the dog owns you. Most humans just haven’t it figured out yet.

I thought this was only true with cats.  8)

and women  :)  (title to me is still free & clear but that may change soon.)

Dogs are just along for the ride.
Title: Re: 9984 - Softbank
Post by: ajc on June 25, 2018, 11:11:29 AM

Seems like their Japanese mobile business might file for its IPO next month.

https://asia.nikkei.com/Business/Companies/SoftBank-mobile-unit-to-file-for-IPO-as-soon-as-July


Title: Re: 9984 - Softbank
Post by: tol1 on July 16, 2018, 03:41:07 AM
Great re-rating in the past month. I still struggle to comprehend Tiger's valuation of Vision at 2.5x return though.
Title: Re: 9984 - Softbank
Post by: ajc on October 14, 2018, 03:12:55 PM

SoftBank lines up bankers for record IPO of mobile unit
https://www.ft.com/content/61bb1bfa-ce28-11e8-b276-b9069bde0956

"According to people close to all three investment banks, the technology conglomerate led by Masayoshi Son is planning to complete the sale of between Y2.3tn and Y2.8tn ($20bn to $25bn) worth of shares in SoftBank’s mobile business by late December.
The majority of the issue is expected to be pitched at domestic investors."



Title: Re: 9984 - Softbank
Post by: thowed on October 15, 2018, 03:43:04 AM
Saudi risk?
https://www.bloomberg.com/news/articles/2018-10-15/softbank-s-son-saudi-s-prince-and-a-22-billion-test-of-values?srnd=markets-vp
Title: Re: 9984 - Softbank
Post by: ajc on October 15, 2018, 05:02:00 AM


Saudi risk?

https://www.bloomberg.com/news/articles/2018-10-15/softbank-s-son-saudi-s-prince-and-a-22-billion-test-of-values?srnd=markets-vp



Yeah, my own thinking is a potential collapse of the Sprint/T-Mobile merger is a bigger valuation risk.

I don't think the current administration wants to pick a full-blown fight with the Saudi's. There's too much riding on their co-operation from Israel-Palestine, to Syria, to Iran, to ISIS, to oil prices. Maybe some high profile individuals could be sanctioned to start, but I'm not sure an overwhelming majority of US citizens would want some big blow-up if they understood what Saudi support means in the region. Better the lesser devil you know, is what I'd say the sensible view is from those in Washington.

If that doesn't happen, I think it'd be possible for Softbank to announce they'd take no more Saudi money and cash them out from the Vision Fund as soon as IPO's happen or big buyers can be found. The big solar deal in Saudi would be dead, but that's a small part of the current valuation thesis. Either way, I think Softbank could restructure their current commitments around any future US political moves.

As far as the upcoming Softbank IPO goes, I saw a report they'd be looking for a $90B market cap (https://www.livemint.com/Money/HgosgGJ7c2wJKwXRqilAZN/SoftBank-weighs-the-largest-public-listing-ever.html). After running some rough numbers, I figured that $75B or so was fairer given how KDDI and NTT are valued but that'd still be fine.

At current prices, that values their 75% ARM Holdings stake (worth $24B), their 80% Sprint stake (worth $20B), their 48% Yahoo Japan stake (worth $8B), the Vision Fund (call it a zero to be super conservative from an overall sum-of-the-parts perspective), and their 28% Alibaba stake (worth $105B) at less than $25B in total.
Even if you apply a 20% holding company discount while counting the Vision Fund as a zero, you're easily getting more than $100B worth of assets for $25B.

Seems like a decent margin of safety and relatively egregious mispricing.


Title: Re: 9984 - Softbank
Post by: ajc on October 16, 2018, 06:14:46 AM

Uber proposals value the company at $120 billion in a possible IPO: WSJ

At a $120B IPO price (https://www.cnbc.com/2018/10/16/uber-proposals-value-the-company-at-120-billion-in-a-possible-ipo-wsj.html), the Vision Fund would earn more than 2x on its 2017 bet.

They bought the Uber stake less than a year ago for $9.3B at a $54B blended valuation (http://fortune.com/2018/01/19/softbank-uber-statement-kalanick/).


Title: Re: 9984 - Softbank
Post by: UK on August 19, 2019, 12:12:57 AM
https://www.wsj.com/articles/softbank-to-lend-founder-and-employees-billions-to-invest-in-fund-11566051247

Unusual setup doubly exposes the Japanese company to a startup economy that is starting to show cracks
Title: Re: 9984 - Softbank
Post by: Spekulatius on August 19, 2019, 04:09:13 AM
One concern is that ARM is not doing well (value ~ 10- of their market cap). Their revenue growth has stalled  stalled and their earnings have shrunk dramatically. I think it may be worth far less than what they paid for. Also, they seemed to have segregated their Chinese business in a separate company. I guess that means that they can welcome the CCP to their management team.

However, with a LTV of 19%, they should be OK, as long as Alibaba does OK.
Title: Re: 9984 - Softbank
Post by: UK on September 24, 2019, 01:20:19 AM
https://www.wsj.com/articles/what-drove-softbanks-vision-fund-up-is-dragging-it-down-11569243411

By financing much of its assets with what is essentially debt, the Vision Fund has increased its risk. Roughly 40% of the Vision Fund’s capital—$40 billion—is in the form of preferred stock, which promises a return of 7% a year, just like debt. It is unusual for a fund to include preferred shares. SoftBank has retained proceeds from asset sales to ensure it can pay the coupon.

Already, some of SoftBank’s plans for extracting cash to pay the Vision Fund’s investors are starting to look overly optimistic. SoftBank Chief Executive Masayoshi Son —the mastermind behind the fund—said he is counting on five or six IPOs from its portfolio during the fiscal year ending March 2020, and another 10 the following year. But many of the Vision Fund’s companies are still burning through cash and losing money, something that the public markets may not view favorably, as We’s attempt to list has shown.

The fund can borrow more if it needs to generate cash quickly. In August, it said it had secured an unusual three-year loan facility, backed by its shares in Uber and Guardant. The loan lets it borrow up to $4 billion to return cash to its investors. Having some form of leverage isn’t unusual for a large fund, but it isn’t common practice to use stakes in public companies as collateral on loans.

If the fund had invested when markets were cheap, it might have benefited from a rebound. Instead, in the 11th year of the longest bull market in history, the fund said it has invested close to $85 billion of the nearly $100 billion it raised in 2017. Three of those investments— Uber, We and Didi—account for nearly 30% of the Vision Fund’s portfolio by value, estimates research firm Astris Advisory.

SoftBank’s $33 billion stake in the fund, which accounts for more than half of the equity in the fund, also relies on borrowed money. SoftBank itself has more than $160 billion in debt, and the company extended about $8 billion in loans to Vision Fund employees to invest in the fund, the Journal reported.
Title: Re: 9984 - Softbank
Post by: Spekulatius on September 24, 2019, 04:06:34 AM
Yes, Softbank looks very iffy. It looks like they will get bailed out with Sprint, but I also think that SRM Semi might end up being a poor investment, based on the recent results.

With all that debt, Softbank could end up being the Lehman of the engt crisis. It won’t end up destroying the financial system, but it could severely impair startup economy, especially the many company now that scale to size while using tons of money. When the public IPO exit door would closed, there could be a lot soul searching for these institutional investors on what to do and how to value their holdings.
Title: Re: 9984 - Softbank
Post by: thepupil on September 24, 2019, 06:14:06 AM
I'm confused. Softbank appears to have very little holdco debt relative to its assets.

they own $120 billion of BABA. It would take an impairment in that to bring the ship down.

Softbank looks super liquid and low leverage to me, and has extremely low cost debt.

I don't have an opinion on the stock, but investing poorly through the vision fund does not translate to insolvency.

 They own $120 billion of BABA shares, which trade $3.5 billion a day.

https://cdn.group.softbank/en/corp/set/data/irinfo/presentations/analyst/pdf/2019/investor_20190809_finance.pdf


Said another way, Softbank trades for $88 billion and claims $196 billion of NAV (42% of assets BABA, 18% of assets TelCo, 13.5% Vision Fund, 10% ARM, + a little bit of "other"). There is $108 billion (50%+) discount to NAV. Isn't the market already writing off a lot here?
Title: Re: 9984 - Softbank
Post by: Jurgis on September 24, 2019, 07:59:49 AM
@thepupil: I think a lot hinges on the Vision Fund preferred shares payout. It seems that Softbank is on the hook to pay Vision Fund pref holders 7% annually irrespective of Vision Fund actual return. Which might be an issue if/when Vision fund does not return 7% (what if it returns -20%?). I don't know all the legalities of this and how Softbank has to cover this and can they refuse to pay without hurting Softbank itself. IMO though, any Softbank analysis has to understand the Vision Fund pref situation in depth.
Title: Re: 9984 - Softbank
Post by: mwtorock on September 24, 2019, 08:02:58 AM
@thepupil: I think a lot hinges on the Vision Fund preferred shares payout. It seems that Softbank is on the hook to pay Vision Fund pref holders 7% annually irrespective of Vision Fund actual return. Which might be an issue if/when Vision fund does not return 7% (what if it returns -20%?). I don't know all the legalities of this and how Softbank has to cover this and can they refuse to pay without hurting Softbank itself. IMO though, any Softbank analysis has to understand the Vision Fund pref situation in depth.

Barron's on the past weekend had an article about this too. The market is effectively valuing Vision Fund at -50B.
Title: Re: 9984 - Softbank
Post by: Jurgis on September 24, 2019, 08:10:03 AM
@thepupil: I think a lot hinges on the Vision Fund preferred shares payout. It seems that Softbank is on the hook to pay Vision Fund pref holders 7% annually irrespective of Vision Fund actual return. Which might be an issue if/when Vision fund does not return 7% (what if it returns -20%?). I don't know all the legalities of this and how Softbank has to cover this and can they refuse to pay without hurting Softbank itself. IMO though, any Softbank analysis has to understand the Vision Fund pref situation in depth.

Barron's on the past weekend had an article about this too. The market is effectively valuing Vision Fund at -50B.

I read Barron's article. I don't think it covered the Vision Fund pref issue. Although I cannot access the WSJ article UK has posted, the excerpt seems to cover the problems with prefs more than Barron's did.

I am not denying that SOPT looks good. And I don't have a number to put on as Vision pref negative SOPT adjustment.  ::)
Title: Re: 9984 - Softbank
Post by: SharperDingaan on September 24, 2019, 08:23:37 AM
Softbank needs the Unicorn bubble to hold up; few think that's going to happen, hence the 110B cut to NAV.
If anything, the .com implosion evidenced that tech bubble corrections overshoot by quite a bit. Hence, when anything to do with unicorns becomes radioactive - it's hard to see how Softbank doesn't drop at least another 40-60% percent from current levels.

However, the .com implosion also evidenced that there is real value-add in these bubbles - it's just not very much, and very scattered.
A Softbank is more likely to get consolidated, versus liquidated; and recapitalized from the 'funny money', made on the way down. A thrill-seeking ride, but perhaps not for everyone.

SD
Title: Re: 9984 - Softbank
Post by: thepupil on September 24, 2019, 09:40:57 AM
https://www.ft.com/content/b6fe313a-4add-11e7-a3f4-c742b9791d43

This article says that the Vision Fund's external investor invested through a combination of preferred and common, whereas Softbank Group invested solely through common equity.

This would increase the probability that Softbank Group experiences severe writedowns in its common interest in the Vision Fund and also somewhat cushion Saudi et al from writedowns to a certain degree. From my reading it does not encumber Softbank Group with a liability, it simply makes Softbank's interest int he Vision Fund (13% of assets or whatever, according to the presentation) more levered.

I view this as risk reducing smart financing on the part of Softbank that scales the size of the fund and limits their dollars they ahve to risk.


I'm only really starting to dig into this, but I feel like this will start to become assymetric with incremental moves down, continued indication of capital impairment in WeWork, etc.
Title: Re: 9984 - Softbank
Post by: Spekulatius on September 24, 2019, 11:29:01 AM
I would also add that BABA itself is a black box with enough yellow flags to make me stay away as far as possible . The complexity of their balance sheet  is mindboggling. Now with Jack Ma gone and the party having a good say and what is happening, I don’t think it can be valued easily. It’s not like Mr. Market has never been wrong on Chinese companies before.
Title: Re: 9984 - Softbank
Post by: UK on September 26, 2019, 01:29:27 AM
https://www.wsj.com/articles/softbank-backed-real-estate-broker-compass-hit-by-high-level-exits-11569439433

“Generally speaking, people join these companies in large part for the wealth creation that an IPO brings,” said Jack Micenko, a senior analyst at trading and tech firm Susquehanna International Group. “To the extent that anyone in a senior position at one of these startups leaves prior to an IPO, [it] is somewhat unusual.”

The startup has a valuation of more than $6.4 billion, or about nine times the size of the market capitalization of Realogy, a publicly traded company that owns the brokers Corcoran Group and Sotheby’s International Realty among other real estate brands. Like We, Compass has sought to make a case that it is more of a tech startup than a real-estate company. The residential broker has long said it would develop an “end-to-end” technology platform to facilitate real-estate transactions, handling everything from searching for a property to securing title and home insurance. At one point, Compass touted its plans for an interactive sale sign illuminated by LED to make it visible on lawns at night. “Compass is just Realogy with better branding,” said Mike DelPrete, a scholar in residence on real-estate technology at the University of Colorado Boulder.

Mr. Rein has said that near-term profitability isn’t a priority. “Investors now have an incredible long-term view—20, 30, 40 years…They’re saying, ‘Who can build something that people love?’” he said in an April interview with The Wall Street Journal. In that same interview, Ms. Gavet said the company didn’t have a clear strategy to monetize the business. “We just know that there’s definitely going to be a business model behind these things given how much money is in this industry,” she said.
Title: Re: 9984 - Softbank
Post by: UK on September 29, 2019, 09:40:10 PM
https://stratechery.com/2019/neither-and-new-lessons-from-uber-and-vision-fund/
Title: Re: 9984 - Softbank
Post by: cherzeca on October 31, 2019, 11:06:22 AM
couple vignettes:

1. from 10/31 WSJ. "Flying over Europe in a private jet last year, Rajeev Misra [head of VF] took his shoes off and propped his bare feet on the knee of a top executive of FIFA, soccer’s governing body. The executive froze while Mr. Misra, head of SoftBank Group Corp. 9984 3.71% ’s $100 billion Vision Fund, chatted about ways to make more money off the streaming rights for the organization’s tournaments."

misra is an ex-banker.  anybody who has worked at an investment bank or biglaw firm knows this is a dominance game played by midlevel bankers and lawyers...you come to a colleague's office, sit in chair opposite desk, put your feet up on his desk, and chat.  you would never do this to a senior or mentor, though they might do it to you, but you would do it to someone just above or below you, as if in peacock display.

that Misra would do a bare feet on leg dominance display to a top executive shows to me the guy is out of his friggin mind.

2.  someone I know who covers the public RE brokers was asked to give a talk to VF individuals who, as it was represented, were responsible for VF investment in Compass.  long story short, the VF individuals had no clue what they were doing or what the prospects for large RE brokerages were.  talk to the hand, in essence
Title: Re: 9984 - Softbank
Post by: Value^2 on October 31, 2019, 11:38:51 AM
https://www.wsj.com/articles/rajeev-misra-built-softbanks-vision-fund-now-he-has-to-save-it-11572536439?mod=rsswn

Why not post  link, it's a good story!
Title: Re: 9984 - Softbank
Post by: thepupil on February 11, 2020, 05:58:12 AM
Softbank is up 8% or so year to date and about 20% from its October 2019 1 year low, but there have been some interesting developments lately

1) Elliott bought $2.5 billion of the shares (neutral to positive, not a negative)

http://thejewishvoice.com/2020/02/paul-singers-nyc-hedge-fund-collects-3b-stake-in-softbank/
https://www.wsj.com/articles/elliott-push-at-softbank-reflects-rise-of-shareholder-activism-in-japan-11581341934
https://www.barrons.com/articles/elliott-managements-plan-to-fix-softbank-51581120898
https://www.ft.com/content/236917e0-4973-11ea-aeb3-955839e06441

2) Sprint / T-Mobile Approved; given that 9984 owns 83% of Sprint and the stock is up 70% or whatever, this is clear positive.

The quantum of the above two developments may be overshadowed by coronavirus and its impact on the most important holding, Alibaba, though BABA / 9988 have been remarkably resilient.

Still $100 billion market cap for $200 billion+ of risk assets with angry Elliott in the mix and the leading e-commerce company in China is pretty enticing.

might buy a little, tail hedged of BABA (ie buy $100 of Softbank and for every $100 buy $100 notional of 30% OTM long term puts on BABA for like $5-$6
Title: Re: 9984 - Softbank
Post by: plato1976 on April 04, 2020, 09:01:54 PM
Does anyone have the latest NAV details on softbank , esp. after the recent plunge of uber, wework, etc. ?  they can be wiped out in the vision fund

Softbank is up 8% or so year to date and about 20% from its October 2019 1 year low, but there have been some interesting developments lately

1) Elliott bought $2.5 billion of the shares (neutral to positive, not a negative)

http://thejewishvoice.com/2020/02/paul-singers-nyc-hedge-fund-collects-3b-stake-in-softbank/
https://www.wsj.com/articles/elliott-push-at-softbank-reflects-rise-of-shareholder-activism-in-japan-11581341934
https://www.barrons.com/articles/elliott-managements-plan-to-fix-softbank-51581120898
https://www.ft.com/content/236917e0-4973-11ea-aeb3-955839e06441

2) Sprint / T-Mobile Approved; given that 9984 owns 83% of Sprint and the stock is up 70% or whatever, this is clear positive.

The quantum of the above two developments may be overshadowed by coronavirus and its impact on the most important holding, Alibaba, though BABA / 9988 have been remarkably resilient.

Still $100 billion market cap for $200 billion+ of risk assets with angry Elliott in the mix and the leading e-commerce company in China is pretty enticing.

might buy a little, tail hedged of BABA (ie buy $100 of Softbank and for every $100 buy $100 notional of 30% OTM long term puts on BABA for like $5-$6
Title: Re: 9984 - Softbank
Post by: Xerxes on April 06, 2020, 05:46:55 AM
I recall reading somewhere that SoftBank maintains updated NAV on its website.

I was once, some years back, under the voodoo magic of Masa Son. I did manage to sell the whole lot with a 40% gain a week prior to Uber IPO. What broke the magic for me was WeWork. I was ok and still am ok with Uber.

I really had a hard time to square that WeWork thing with the conservative view Brookfield had when it came to real asset investments. And btw I am non expert when it comes to real estate (my background is in Aerospace). . Just the optics looked really weird to me between the two.

I think SoftBank deserves permanent discount to NAV.
Title: Re: 9984 - Softbank
Post by: Xerxes on April 06, 2020, 08:23:11 AM
there it is

https://group.softbank/en/ir/stock/sotp

where they maintain a live version of discount to NAV
Title: Re: 9984 - Softbank
Post by: A Dhandho Investor on June 15, 2020, 12:13:18 AM
https://www.bloomberg.com/news/articles/2020-06-14/softbank-invested-in-credit-suisse-funds-financing-its-bets-ft#:~:text=SoftBank%20poured%20money%20into%20more,as%20well%20as%20marketing%20documents. (https://www.bloomberg.com/news/articles/2020-06-14/softbank-invested-in-credit-suisse-funds-financing-its-bets-ft#:~:text=SoftBank%20poured%20money%20into%20more,as%20well%20as%20marketing%20documents.)

Quote
SoftBank poured money into more than $500 million in Credit Suisse investment funds that in turn invested in debt of the startups backed by the Japanese company’s Vision Fund, the Financial Times reported, citing three people familiar with the matter as well as marketing documents.

If only there was a name for this kind of scheme  ::)
Title: Re: 9984 - Softbank
Post by: fareastwarriors on September 12, 2020, 03:41:02 PM
Nvidia nears deal to buy chip designer Arm for more than $40 billion, sources say

https://www.reuters.com/article/businessNews/idUSKBN2630UE
Title: Re: 9984 - Softbank
Post by: ValueMaven on September 12, 2020, 03:41:42 PM
Lots going on here right now ... stupid massive option trade ... but it looks like they might sell ARM for $40b.  Still deeply discounted to NAV.  Thoughts?
Title: Re: 9984 - Softbank
Post by: Liberty on September 12, 2020, 03:53:39 PM
Lots going on here right now ... stupid massive option trade ... but it looks like they might sell ARM for $40b.  Still deeply discounted to NAV.  Thoughts?

Considering they paid 32 billion for ARM in 2016, and in 2016 Nvidia had a similar market cap to ARM, I'd say both companies have had pretty different trajectories..
Title: Re: 9984 - Softbank
Post by: Spekulatius on September 12, 2020, 04:58:14 PM
Lots going on here right now ... stupid massive option trade ... but it looks like they might sell ARM for $40b.  Still deeply discounted to NAV.  Thoughts?

Considering they paid 32 billion for ARM in 2016, and in 2016 Nvidia had a similar market cap to ARM, I'd say both companies have had pretty different trajectories..

The ARM acquisition was certainly a failure, as the revenues haven’t risen much and earnings evaporated. It looks like a deal due to rising tech valuations bails SoftBank out, similar what happened with the Sprint sale.
It’s a big positive for SoftBank unless they make another dump acquisition with proceeds.
Title: Re: 9984 - Softbank
Post by: fareastwarriors on September 13, 2020, 11:41:17 AM
Embattled SoftBank renews talks on taking the group private, FT reports

https://www.reuters.com/article/us-softbank-group-private/embattled-softbank-renews-talks-on-taking-the-group-private-ft-reports-idUSKBN2640TM (https://www.reuters.com/article/us-softbank-group-private/embattled-softbank-renews-talks-on-taking-the-group-private-ft-reports-idUSKBN2640TM)
Title: Re: 9984 - Softbank
Post by: fareastwarriors on September 17, 2020, 09:56:41 PM
SoftBank Group to sell U.S. cellphone distributor Brightstar in latest asset sale

https://www.reuters.com/article/us-softbank-group-divestiture/softbank-group-to-sell-u-s-cellphone-distributor-brightstar-in-latest-asset-sale-idUSKBN2690A1 (https://www.reuters.com/article/us-softbank-group-divestiture/softbank-group-to-sell-u-s-cellphone-distributor-brightstar-in-latest-asset-sale-idUSKBN2690A1)

Brightstar could be valued at more than $1 billion, the people said.

SoftBank said in a statement it would sell the firm to a newly formed subsidiary of private equity firm Brightstar Capital Partners for cash as well as a 25% stake in the subsidiary. Brightstar Capital is not an affiliate of Brightstar Global, the statement said.
Title: Re: 9984 - Softbank
Post by: ValueMaven on September 19, 2020, 04:47:48 PM
Yes - I saw that.  Thank you for posting.  Still trading well below its equity stakes + operating biz it owns.  The market doesnt believe Masa's plan, and continues to think he will act irrationally.  Still, he has raised nearly $75B in asset sales over the past 3 months.  IVe been waiting for a pull-back to start a position here - but it hasnt happened yet. 
Title: Re: 9984 - Softbank
Post by: Spekulatius on September 19, 2020, 04:55:18 PM
Yes - I saw that.  Thank you for posting.  Still trading well below its equity stakes + operating biz it owns.  The market doesnt believe Masa's plan, and continues to think he will act irrationally.  Still, he has raised nearly $75B in asset sales over the past 3 months.  IVe been waiting for a pull-back to start a position here - but it hasnt happened yet.

The ARM sale was just n set swap against richly valued NVDA stock. It remains to be seen how this works out. We don’t know the deal conditions either and if he negotiated a price floor.
Title: Re: 9984 - Softbank
Post by: Xerxes on September 19, 2020, 09:37:05 PM
Yes - I saw that.  Thank you for posting.  Still trading well below its equity stakes + operating biz it owns.  The market doesnt believe Masa's plan, and continues to think he will act irrationally.  Still, he has raised nearly $75B in asset sales over the past 3 months.  IVe been waiting for a pull-back to start a position here - but it hasnt happened yet.

ValueMaven

You cannot wait for a pullback on an absolute sense for a name like this only in relative terms vs. sum of the parts.(I.e. widening of spread is your pullback).

 If you are waiting for a pull back on an absolute sense, you are really waiting for pull back on Alibaba. 
Title: Re: 9984 - Softbank
Post by: ValueMaven on September 20, 2020, 05:26:55 AM
No disagreement there.  But their stake in BABA only is worth $160B vs. Softbank of $110B - plus you get all sorts of various odds and end investments.  I get it - there is a serious Masa discount here.  But what if the company is really turning from a governance perspective?!  There was an interview in Barron's this weekend from the Saudi Investment Fund - he had some interesting things to say re: Softbank/Masa/Vision Fund.   
Title: Re: 9984 - Softbank
Post by: sagiv131 on September 20, 2020, 01:27:22 PM
All the share pledges, both company and personal for Masa, make me wonder whether the balance sheet tells the real story there or we're missing a ton of off-BS items and, like Alibaba, debt and liabilities that are just pushed onto subsidiaries that are impossible to see. Seems pretty difficult to unravel; props to Elliott for trying but without the level of detail they probably have I don't see how this becomes 'obviously undervalued' for most investors.
Title: Re: 9984 - Softbank
Post by: Xerxes on September 20, 2020, 05:57:04 PM
Thanks just read that interview on Barrons.
If you are interested the head of PIF had interview with David Rubenstein on Bloomberg few months ago.

With IPO of Softbank Mobile in Dec 2018, and the merger of Sprint and T-Mobile and Softbank position being shifted from a strategic investor to a financial investor in the combined company (a diminishing one at that), and the rise of Vision Fund(s), that should have garnered a asset manager valuation for Softbank as oppose to telecom company.

Thanks to the implosion of WeWork (even Saudis were like, dude we can buy real estate ourselves, we don't need SVF to buy that with technology multiples and charge us management fee), Softbank is not getting that asset manager valuation based on a stream of steady management fee and lumpy return on the carry (ala Blackstone or Brookfield). I think the pendulum was swinging toward that goal but got stuck as the flow of third party capital went down to zero.

Now, with the asset manager side of the business not getting credit, I think Softbank is just being valued for what it is, a heavily discounted sum of equities and a financial investment. The core cash flow engine which was Softbank Mobile was supposed to be replaced by Vision Fund and its successor funds. So that cash-generating operating business is not there ... or is there but not performing.

Softbank is a great story to follow I think. I find Masayoshi Son fascinating. Was an investor from the week he bought ARM in 2016 and sold right before Uber's IPO and invested the proceeds in Tencent, which has close to 700 equity investments, I believe, but more importantly it has a "core" cash flow generator. That is what I am after. For BRK and FFH, that is their insurance business, for BAM and BX, that is their third-party capital inflow. Softbank doesn't have that. You can basically build a synthetic Softbank by combining separate investments in Alibaba, Uber, Didi*, Nvidia, T-Mobile, Slack and add a few call options to make it volatile, Masa-style. i.e. an investment in the equity of Softbank is not getting you anything unavailable in the market.

So unless one is playing the long-short sum of the parts strategy to bet on that spread closing, in my opinion, that entity is not investable. 

* Didi is private, but you get that when you buy Uber, anyway


Softbank and Berkshire have one thing in common though, they both have a $1 billion bet on Amazon.