Shulou(Shulou.com)11/24 Report--

Sina Science and Technology News Beijing time on August 10 morning news, it is reported that in six months, the vision fund managed by Japan's Softbank Corp. Group reported a paper investment loss of 50 billion US dollars, affected by this, Softbank Corp. Group recently began to accelerate the sale of assets. However, according to analysts, Softbank Corp. Group CEO Masayoshi son is currently facing difficulties, with the depreciation of equity assets, he does not have many options.

Son revealed this week that he was in talks with acquirers to sell Fortress, an asset management company owned by SoftBank, but did not say much about the transfer price.

In the just-concluded second quarter, Softbank Corp. sold its stake in US telecom operator T-Mobile USA, cashing out $2.4 billion, while Softbank Corp. also sold other stakes.

Under the general situation of the capital market, the valuation of Softbank Corp. 's equity assets has fallen, and it is more difficult for son to cash out through equity.

Softbank Corp. Group has undergone a transformation in the past, from a company with physical business to a more pure technology holding company. Son, who used to have the crown of the myth of technology investment, received legendary returns from a series of investments and continued to invest in new projects. In the view of analysts, son will not bet on his reputation and sell the equity assets held by Vision Fund at a loss.

Kirk Boodry, an industry analyst at Redex Research in the United States, said in a recent research report that many investments of the Vision Fund have lost money, and it is unreasonable to sell assets at a loss price. Boodry said Softbank Corp. 's next sell-off could include Coupang, a South Korean e-commerce company, and DoorDash, an American food delivery company.

In the second quarter of this year, Vision Fund has cashed out from many technology companies, such as Uber, the founder of online car-hailing, Opendoor, a real estate trading platform, and KE Holdings, which runs the shell search service. The Vision Fund made a total of $5.6 billion in profits on these cash-out projects.

Boodry analysis said that the Uber stake that Vision Fund withdrew in the second quarter was also the last stake, with a profit of $1.5 billion. At the beginning, son invested in Uber because he was optimistic about the company's future self-driving car business. Softbank Corp. invested heavily to become the company's largest shareholder, but Uber later abandoned plans to develop self-driving cars.

Atul Goyal, an analyst at Geoffrey Securities in the United States, said in a research report that now, as long as the price is reasonable, Softbank Corp. Group is willing to cash out shares in any invested company. For Softbank Corp. shareholders, this is good news, but for the invested company, it is not good.

In the past difficult period of operation of Softbank Corp. Group, son also cashed out the equity to tide over the difficulties, such as in the early stage of the global COVID-19 epidemic. At the time, Masayoshi son said that many technology startups had fallen to the "COVID-19 trough".

In 2020, Softbank Corp. Group and US chip giant Nvidia reached an agreement to sell British semiconductor design company ARM, but the deal encountered government antitrust regulatory resistance in many countries, and the two sides were forced to abandon the deal. At present, Masayoshi son plans to list the company independently in the United States.

Alibaba is one of son's most successful investment projects, and Softbank Corp. Group has sold Alibaba's stake in the past to raise cash.

However, global capital markets have changed and the valuations of many companies have fallen.

In the past few months, Softbank Corp. has sold Alibaba's stake in a prepaid forward contract, raising a total of $17.3 billion. However, Alibaba's market capitalization has evaporated by 2/3 compared with its peak in 2020.

On Monday, son said Softbank Corp. Group would take a "defensive posture" and reduce investment activities and operating costs throughout the group in the future.

Some analysts say that in the future, the equity assets of some unlisted companies will continue to depreciate, making it more and more difficult to make investment profits. Son also admitted that Softbank Corp. Group is already in the stage of "valuation bubble".

Goyal, an analyst at Geoffrey, said that compared with listed companies, the asset prices of private private companies are still inflated, so the depreciation will be serious in the future.

In addition to adjusting the investment structure, Softbank Corp. Group also announced that it will spend 400 billion yen ($2.97 billion) to buy back the company's shares, which is a new round of buybacks. Softbank Corp. 's last round of buyback plan totaled 1 trillion yen, and so far 70% of the tasks have been completed, and the last round of repurchase plan is scheduled to be completed in November this year.

Satoru Kikuchi, an analyst at Nikko Securities of Sumitomo Mitsui Bank, said in a research report that the structure of Softbank Corp. Group is likely to be restructured in the not-too-distant future, including the management's purchase of Softbank Corp. Group.

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