Author Topic: 9984 - Softbank  (Read 72857 times)

ValueMaven

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Re: 9984 - Softbank
« Reply #180 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. 


Spekulatius

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Re: 9984 - Softbank
« Reply #181 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 donít know the deal conditions either and if he negotiated a price floor.
Life is too short for cheap beer and wine.

Xerxes

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Re: 9984 - Softbank
« Reply #182 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. 

ValueMaven

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Re: 9984 - Softbank
« Reply #183 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.   

sagiv131

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Re: 9984 - Softbank
« Reply #184 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.

Xerxes

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Re: 9984 - Softbank
« Reply #185 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.
« Last Edit: September 20, 2020, 07:37:36 PM by Xerxes »