SoftBank’s Einstein pitch fails relativity test

Oyo

06/02/2019 10:01

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Liam Proud
    LONDON, Feb 6 (Reuters Breakingviews) - Masayoshi Son
invoked the Nobel Prize winner’s theories to argue the Japanese
group is worth $110 bln more. But adjust his sums for low
liquidity and the possibility of squandered cash, and the black
hole is small. Massive objects like the Vision Fund distort the
laws of physics.
        
    Full view will be published shortly.
    On Twitter https://twitter.com/liamwardproud
    
    CONTEXT NEWS
    - Japan's SoftBank Group on Feb. 6 reported operating profit
of 1.9 trillion yen ($208.5 billion) for the nine months ending
in December, 62 percent higher than in the same period a year
earlier. 
    - The rise was driven mostly by an increase in the fair
value of investments held in the SoftBank-run Vision Fund and
Delta Fund, which contributed about 809 billion yen of operating
profit. 
    - The fair value of shares owned in chipmaker NVIDIA fell,
but the Vision Fund’s investment was mostly protected through
collar transactions which hedge its exposure to market
fluctuations. Meanwhile the investment values of Indian
e-commerce group Flipkart, hotel-booking site OYO and
ride-hailing app Uber all rose. SoftBank transferred Uber’s
shares to the Vision Fund in the most recent quarter.
    - At the end of 2018 the Vision Fund had 49 investments at a
cost of $45.5 billion. The fair value amounted to $55.3 billion,
excluding investments that have been sold. 
    - SoftBank said it would use part of the proceeds from the
recent initial public offering of its Japanese telecom arm to
buy back roughly 6.5 percent of shares excluding treasury stock,
with a maximum spend of 600 billion yen.
    - SoftBank shares closed at 8,462 yen before the
announcement.
    - For previous columns by the author, Reuters customers can
click on  PROUD/ 
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
SoftBank Group unveils $5.5 billion stock buyback, Q3 profit
soars 60 pct     urn:newsml:reuters.com:*:nL3N201117
SoftBank statement    https://cdn.group.softbank/en/corp/set/data/irinfo/financials/financial_reports/pdf/2019/softbank_results_2019q3_001.pdf
BREAKINGVIEWS-SoftBank-WeWork mess exposes cracks in Vision Fund
    urn:newsml:reuters.com:*:nL8N1Z81NB
BREAKINGVIEWS-SoftBank’s downward debut damns Japan’s IPO market
    urn:newsml:reuters.com:*:nL3N1YO0PK
BREAKINGVIEWS-SoftBank writedown will cloud Son’s way forward   
 urn:newsml:reuters.com:*:nL1N1Y91RH
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 (Editing by Peter Thal Larsen and Bob Cervi)
 ((liam.proud@thomsonreuters.com; Reuters Messaging:
liam.ward-proud.thomsonreuters.com@reuters.net))