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When the corona pandemic hit hard this winter, few companies were more vulnerable than Japanese technology and investment company Softbank.
The company has been the largest and most important investor in the sharing economy, with ownership positions that include transportation company Uber and office rental company Wework, companies that depend on open partnerships.
– Short-term pessimistic
Founder and CEO Masayoshi Son, who is ranked the second-richest in Japan with a fortune of more than $ 32 billion, is taking no chances. In a post in the New York Times “Dealbook Conference” on Tuesday, he confirmed he was optimistic about the prospect of a vaccine leading to standardization.
But, it is several months ahead of time.
– I’m pessimistic in the short term, Son said.
The number of confirmed cases of coronary heart disease has exceeded 55 million worldwide and increased by more than half a million each day on average in November.
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In the next two to three months, any disaster can strike. We are preparing for everything, a “worst case scenario,” he said.
He did not elaborate on the disasters he was thinking of, but showed the collapse of the financial institution Lehman Brothers in 2008, which set off a chain reaction that could not be stopped. The events triggered the financial crisis, which spread to much of the world.
– Anything can happen in the situation in which we find ourselves. A vaccine is coming. But who knows what will happen before then. A large company can collapse and it can trigger a domino effect, he said.
– I have to buy, I have to buy
Son has sold companies and property positions in recent months and has cash reserves of almost 80 billion dollars (700 billion crowns).
This is double what he had planned when he realized that a pandemic was about to hit the world this winter.
– I said to myself, “My God, this is the best time to buy back shares.” There was a discount in the price of the underlying securities of more than 70 percent, about 75 percent. I just said, “I have to buy, I have to buy,” Son said.
Softbank’s share price fell almost in half in four weeks. The share price is now 15 percent higher than before the corona pandemic.
US computer chip company Nvidia has agreed to buy Arm Holdings, owned by Softbank, which develops advanced computer processors, for $ 40 billion. The price of the US mobile business generated 20 billion dollars.
SoftBanks Vision Fund has ownership positions in more than 80 different technology companies in the start-up phase.
Strong in faith in start-ups
In May, the company presented the deviated financial year annual result with a negative result of NOK 123 billion. The top manager and founder Masayoshi Son criticized himself in several of the investments.
– We failed when it came to Wework’s investment. I was stupid, he said during the presentation of the results.
In total, Softbank invested more than $ 18 billion in Wework and the company was close to listing with an estimated value of between $ 60 and $ 112 billion, according to facilitators. Most of the investment has been lost to Softbank, Son confirmed.
Softbank’s top executive has not lost faith in the startup industry. In October, the Norwegian quiz and learning platform Kahoot received $ 215 million, equivalent to NOK 1.98 billion, from Softbank.
– I want to be offensive and invest more in the startup sector. Prices for so-called capital-intensive unicorns have improved, Son said.
A unicorn has become a term for a tech startup that achieves a valuation of more than a billion dollars before going public.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
