Shares of Japanese billionaire Masayoshi Son’s Tokyo-listed SoftBank Group hit an all-time high of 10,420 Japanese yen on Tuesday–more than two decades after reaching a previous high of 10,111 yen in February 2000. Son’s latest stock surge lifted his fortune to $48 billion, a tad below retail billionaire Tadashi Yanai’s net worth of $48.2 billion.
SoftBank’s stock has soared 221% since the firm’s founder appeared on the World’s Billionaires List in 2020, when his net worth stood at $16.6 billion, marking a clear reversal in fortunes for the tech billionaire, who owns a 27% stake in the company.
Analysts attribute the stock’s recent run-up to a slew of factors ranging from asset sales to fund a stock buyback to a string of successful IPOs in the past few months.
From April to September 2020, SoftBank has been on a selling spree that yielded a cumulative 5.6 trillion yen ($53 billion). The sales included shares in American wireless network operator T Mobile, Chinese e-commerce giant Alibaba as well as telecom affiliate SoftBank Corp. The new funds enabled the firm to buyback 1.3 trillion yen ($12.42 billion) worth of shares as of January 31, 2021.
Additionally, SoftBank signed a $40 billion deal in September 2020 to sell its stake in chip designer Arm to U.S. semiconductor manufacturer Nvidia. SoftBank also reported strong numbers for the nine months ended December 31, 2020. Net sales rose 6% to 4,138 billion yen ($40 billion), while net income surged 541% to 3,055.2 billion yen($29.6 billion). The firm reported cumulative investment gains of $27.6 billion across its SoftBank Vision Funds 1 and 2 in the same period.
The coronavirus pandemic, ironically, contributed to this positive outcome. In a February presentation, SoftBank noted that with regard to the vision funds there was a “significant growth in asset values driven mainly by a greater demand for online services under Covid-19 and IPOs of portfolio companies.”
A slew of successful IPOs of Son-backed companies in Silicon Valley, such as online property marketplace Opendoor; food delivery app DoorDash and biomed outfit Seer, added extra sizzle to the SoftBank stock. Son is seeking more IPO bonanzas in 2021 with SoftBank-backed start-ups such as Indian insurance aggregator PolicyBazaar and China’s ride-hailing company Didi Chuxing, expected to list. This month, South Korean e-commerce firm Coupang, in which SoftBank has more than a one-third stake, filed for an IPO.
The Japanese billionaire wants to take 10 to 20 portfolio companies public each year, a target that analysts say could be achievable.
“We believe SoftBank Group is in a favorable position as it is in the right place with many large sized investments in private companies at the right time–when there is this IPO frenzy,” says Jefferies Singapore analyst Atul Goyal.
Son recently compared SoftBank to a goose that lays golden eggs, stating that he wants his investment funds to produce between 10 and 20 “golden eggs” a year. That should put the ghost of the failed WeWork IPO of 2019 firmly to rest.
Discussion about this post