SoftBank Continues To Be Valued At An Unwarranted Discount
What Softbank's Stock Price Tell Us About Alibaba's Valuation (And Why It Makes Yahoo Look Even Cheaper)
Jeremy Raper • 19 Comments
Jeremy Raper • 19 Comments
SoftBank: For Exposure To Alibaba, Look To Tokyo, Not Sunnyvale
Helix Investment Research • 31 Comments
Helix Investment Research • 31 Comments
Tue, Jul. 19, 3:15 AM
- SoftBank (OTCPK:SFTBY) fell 10% as investors reacted to the company's announcement to acquire ARM Holdings for $32B.
- Shares of messaging app Line (Pending:LN) also dropped 10% following a successful dual listing last week in New York and Tokyo.
- Nintendo (OTCPK:NTDOY) continued to climb on "Pokemon GO" fever, trading up 14%. Its market cap, now over $42B, has just topped Sony.
Mon, Jul. 18, 2:09 AM
- SoftBank (OTCPK:SFTBY) has acquired chip designer ARM Holdings (NASDAQ:ARMH) for £24.3B ($32B), as the Japanese telecoms giant bolsters its presence in the growing Internet of Things sector.
- The deal will see SoftBank pay £17 in cash for each share in ARM, a 43% premium to its closing price last week, marking the largest ever purchase of a European technology company.
- ARMH +43.6% premarket
Tue, Jul. 5, 8:27 AM
- Tencent (OTCPK:TCEHY) is in talks with potential investors including the Canada Pension Plan Investment Board, China Investment and Hillhouse Capital to participate in its $8.6B acquisition of Supercell from SoftBank (OTCPK:SFTBY).
- According to a document viewed by the WSJ, potential participants in the consortium expect that an investment in Supercell could bring an average annual return of 36% in the next four years.
Thu, Jun. 30, 5:21 AM
- U.S. regulators are examining SoftBank (OTCPK:SFTBY) over possible conflicts of interest or questionable behavior involving former president Nikesh Arora, who stepped down last week.
- SoftBank and Arora have described the departure as an amicable one, saying Masayoshi Son, chairman and chief executive of the company, recently decided he wanted to stay longer instead of handing over power next year.
Wed, Jun. 22, 3:19 AM
- Replacing Nikesh Arora, SoftBank (OTCPK:SFTBY) has picked Ken Miyauchi, head of the group's telecoms operations, to become company president and chief operating officer.
- Arora, the former Google executive handpicked by Masayoshi Son as his successor, abruptly quit the company on Tuesday after it became clear that Son wanted to remain at the helm longer than planned.
Tue, Jun. 21, 7:38 AM
- Under pressure from investors Softbank's (OTCPK:SFTBY) Nikesh Arora - President and heir apparent to CEO Masayoshi Son - is exiting his post.
- Mr. Son says he will continue as CEO longer than planned.
- Since joining Softbank two years ago, Arora has spent close to $4B looking for the next big thing. At this point it's unknown if any of this will pay off, but investors were getting antsy.
- Earlier today: WSJ: Tencent agrees to acquire Supercell
Tue, Jun. 21, 3:50 AM
- Tencent (OTCPK:TCEHY) has reached an agreement to buy Supercell Oy, the maker of the popular "Clash of Clans," in a deal that could turn the Chinese internet major into a global video game powerhouse.
- According to WSJ sources, details of the deal will be announced later today. It was previously reported that Tencent had been in talks with SoftBank (OTCPK:SFTBY) to buy the company's majority stake in Supercell at a $9B valuation.
- Update: Tencent and its partners will pay $8.6B to buy Softbank's (OTCPK:SFTBY) 84.3% stake in Supercell Oy.
Wed, Jun. 15, 1:03 PM
- Chinese messaging/gaming leader Tencent (OTCPK:TCEHY) is close to a deal to buy SoftBank's (OTCPK:SFTBF) controlling stake in Finnish mobile game developer Supercell at a ~$9B valuation, sources tell the WSJ.
- The paper, which first reported of Tencent's interest in Supercell last month, adds Tencent is talking with "several financial investors" to join the deal as co-investors. SoftBank had a 73% stake in Supercell as of last year. Supercell, responsible for Clash of Clans and other hits, was reportedly valued at $5.25B in 2015.
- The report comes as Tencent cautions its rapid ad sales growth (+73% Y/Y in Q1) is about to slow down.
Wed, Jun. 15, 8:53 AM| Wed, Jun. 15, 8:53 AM
Sun, Jun. 5, 9:02 AM
- SoftBank (OTCPK:SFTBY) continues to offload its tech holdings, with a deal to sell its stake in GungHo Online Entertainment (OTC:GUNGF).
- The move, worth about ¥73B ($685M), will see GungHo buy back the stake through a tender offer for ¥294 per share.
- Last week, Softbank increased the total amount of its Alibaba stake sale to $10B.
Fri, Jun. 3, 11:43 AM
- Alibaba (NYSE:BABA) is down another 1.4% today as SoftBank (OTCPK:SFTBY -1.3%) says it's selling more of its stake, bringing the total amount to $10B.
- SoftBank had said late Tuesday it would sell $7.9B worth at minimum. Alibaba bought back $2B worth of its shares from SoftBank for $74/share.
- Now the Japanese company is exercising a greenshoe option to sell more amid strong demand.
- Alibaba shares are down 7% over the past three days in U.S. trading.
Wed, Jun. 1, 8:10 PM
- Alibaba (NYSE:BABA) disclosed terms of its buyback from SoftBank (OTCPK:SFTBY +1.5%), part of the latter company's $7.9B (at minimum) divestment of holdings in the Chinese retail conglomerate.
- It's agreeing to buy just over 27M shares at $74/share, for an aggregate of $2B worth. Members of the Alibaba partnership are buying just over 5.405M shares at the same price, for an aggregate of $400M worth.
- Alibaba closed down 6.5% today, to $76.71 (just 3.7% over the buyback price) in the wake of the news that SoftBank was unloading the sizable stake to raise capital.
- SoftBank also agreed to separate private placements of Alibaba shares amounting to $500M to Gamlight (part of GIC Private Limited) and $500M to Aranda Investments, part of Temasek. Those are at the same $74 share price.
- Previously: Goldman reiterates Buy on SoftBank after surprising Alibaba stake sale news (Jun. 01 2016)
Wed, Jun. 1, 10:31 AM
- Alibaba (NYSE:BABA) is 2.7% lower in U.S. trading, and SoftBank (OTCPK:SFTBY) up 1.7%, the morning after the Japanese company said it would sell at least $7.9B worth of the Chinese retail conglomerate -- a move that surprised Goldman Sachs.
- The impact of such a sale on Alibaba is minimized somewhat by the way it's put together, says SunTrust's Bob Peck. Some $2B in sales are of shares back to Alibaba (and another $400M to members of the Alibaba Partnership), while a newly created trust is offering $5B in securities exchangeable into Alibaba ADS.
- Goldman's Ikuo Matsuhashi says the news came as a surprise, as many hadn't expected SoftBank to “move so quickly in terms of selling a stake in Alibaba given many market observers still believe that the latter has upside."
- Matsuhashi is maintaining a Buy rating on SoftBank and a target price of ¥7,800, 24.8% upside from its current Tokyo price of ¥6,252.
- As for Sprint (S -0.1%), Matsuhashi says the move isn't indicative of a change in circumstances there, since SoftBank management has already (and recently) expressed confidence that the U.S. telecom's earnings would improve.
Tue, May 31, 5:08 PM
- SoftBank (OTCPK:SFTBY) says it will sell at least $7.9B worth of its stake in Alibaba (NYSE:BABA) as part of a series of capital-raising transactions.
- Alibaba shares are 2% lower in after-hours trading on the NYSE.
- Specifically, SoftBank says, it will sell $2B in ordinary shares back to Alibaba; sell $400M worth to members of the Alibaba Partnership and $500M to a "major sovereign wealth fund"; and use a newly formed trust to offer $5B of mandatory exchangeable trust securities, exchangeable into ADS of Alibaba, to qualified institutional buyers in private placement.
- SoftBank will increase its liquidity cushion with the moves, it says.
- Afterward, it expects to continue to hold about 28% of outstanding Alibaba shares.
Wed, May 25, 3:24 AM
- MasterCard (NYSE:MA) has inked a deal with Pizza Hut (NYSE:YUM) to bring Softbank's (OTCPK:SFTBY) robot companion, Pepper, to restaurants across Asia by the end of 2016.
- The move is intended to push the MasterPass digital wallet, which Pizza Hut patrons can use by either tapping the Pepper icon within the app or by scanning a QR code on Pepper's display.
- Besides taking payments, the robot will be able to chat with customers, take orders and make recommendations.
Mon, May 23, 11:10 AM
- Tencent (OTCPK:TCEHY +0.5%) is in early-stage talks to take over SoftBank's (OTCPK:SFTBY +1.9%) majority position in Finnish mobile-game maker Supercell, The Wall Street Journal reports.
- Supercell makes popular combat simulator Clash of Clans, and SoftBank took majority control with a $1.53B investment in 2013, before growing its stake last year to 73%.
- Also last year, Alibaba (of which SoftBank is the biggest shareholder) teamed up with China's Giant Interactive Group to talk about taking control of Supercell, though price has hung up those discussions. And Supercell is said to prefer having autonomy under SoftBank's umbrella.
- Sources say that Supercell was valued about $5.25B last year. Its most recent game, Clash Royale, was the top-grossing mobile game for March with more than $80M.
- Now read Tencent: Like Buying Facebook At A Bargain »
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