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Softbank

Company

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Japanese carrier. One of the largest telecom holdings in the world.

Content

Revenue and Net Profit billions ¥

Assets

+ Softbank

Softbank is relatively little known outside Japan, but in its native country it has a reputation as an aggressive Internet conglomerate. It has a rich history of developing new areas and crowding out competitors due to low prices, new services and unusual advertising.

Assets

The holding includes the telecom operator SoftBank Corp.

Performance indicators

2021: Revenue growth by 11% up to 6.2 trillion yen

SoftBank completed FY2021 with a net loss of yen $1.7 trillion ($13.1 billion) versus yen $5.1 trillion ($46.9 billion) a year earlier. This is a record loss for the company. The company's revenue grew by 11% to sound6.2 trillion ($48 billion). Such data were released on May 12, 2022.

The Japanese conglomerate complained about inflation, rising key rates in different countries and pressure on technology companies in China. Two SoftBank investment funds - Vision Fund 1 and Vision Fund 2 - suffered a net loss from investments of almost 3.55 trillion yen ($27.5 billion). The main investments of these funds are related to IT startups.

SoftBank finished the year with a record loss of $13.1 due to failed investments in IT startups

At a revenue presentation in Tokyo, CEO Masayosha Son acknowledged the losses and promised to begin a more conservative approach. Son added that SoftBank will be more selective in choosing transactions, and will also pursue stricter criteria for new investments and focus on improving the profitability of its portfolio companies, he added.

The value of the largest assets in the portfolio of investment funds SoftBank sharply decreased due to tightening monetary policy and raising key rates in different countries, as well as due to pressure from the Chinese authorities on the technology sector. Among the cheaper companies in the portfolio SoftBank the Chinese conglomerate Didi, which provides taxi aggregator, car sharing and ridesharing services. The company's services are taxi DiDi, car sharing DiDi, Hitch, DiDi Bus, DiDi Minibus, DiDi Test Drive, Bike-Sharing.

The South Korean e-commerce company Coupang was also on the list of anti-records. Also, poor results for the American food delivery service DoorDash and the Indian payment service Paytm, Redex Research analyst Kirk Boudry told the newspaper. In addition, SoftBank owns 25% of Alibaba, whose shares are now 30% cheaper than in 2021.[1]

2020: The biggest losses in history due to Vision Fund

According to the results of the financial year, which ended at the end of March 2020, the losses of the SoftBank Group  from the Vision Fund investment fund controlled by the company reached 1.8 trillion yen (about $16.7 billion). Failed investments in IT projects, problems with WeWork and other assets led to the fact that the entire Japanese group ceased to be profitable.

For the reporting year, SoftBank recorded a net loss of 750 billion yen, while a year earlier, net profit was measured at 1.41 trillion yen. According to analysts, this is the largest monetary loss of the company since entering the exchange in 1994 and the first net loss since the 2005 financial year.

The investment fund brought SoftBank a loss of $16.7 billion. Investments in technology were a failure

The Vision Fund, which is considered the world's largest investment fund in technology startups (its volume exceeds $100 billion), brought monetary losses to SoftBank, in particular, due to "deterioration of the market environment,  unsuccessful investments in WeWork and satellite OneWeb, which in March 2020 declared bankruptcy.

In a crisis, investor attention switched to SoftBank debt, which has already reached $55 billion, writes the Financial Times. According to the publication, the founder and de facto head of the SoftBank Group, Masayoshi Son, pledged to banks about 60% of the company's shares.

In addition, the SoftBank put up assets worth up to 4.5 trillion yen ($41 billion) for sale in order to spend the proceeds to reduce debts, buy back bonds and increase cash reserves. The sale of assets will take place over the next four quarters, starting in March 2020. At the same time, the SoftBank does not specify what exactly will be sold.

On April 13, 2020, when SoftBank reported losses, the company's shares fell 3.4% by the close of the exchange. Since the beginning of the year, quotes have sat by 11.7%.[2]

History

2021

Purchase of a stake in Roche for $5 billion

In early August 2021, it became known that the Japanese corporation Softbank bought a stake in Roche for $5 billion. We are talking about a package of non-voting shares, while the size of the share is not disclosed. More details here.

Investing in the FTX Trading Crypto Exchange

On July 20, 2021, FTX Trading announced that its market value increased to $18 billion. This happened after a round of financing, thanks to which the cryptocurrency platform managed to attract investments in the amount of $900 million. The SoftBank Group Corp. participated in the event to attract financing and it became one of the largest investors for the cryptocurrency exchange. More details here.

Investing in the FTX Trading Crypto Exchange

On July 20, 2021, FTX Trading announced that its market value increased to $18 billion. This happened after a round of financing, thanks to which the cryptocurrency platform managed to attract investments in the amount of $900 million. The SoftBank Group Corp. participated in the event to attract financing and it became one of the largest investors for the cryptocurrency exchange. More details here.

Investing in the fintech startup Revolut

In mid-July 2021, the British fintech company Revolut raised $800 million in a new round of financing led by SoftBank and Tiger Global. According to the results of the round, Revolut's valuation reached $33 billion, which is six times more than $5.5 billion in 2020. More details here.

Purchase of the Yahoo brand for $1.6 billion from Verizon

In early July 2021, it became known that SoftBank would pay Verizon Communications $1.61 billion for an indefinite license to use the trademarks Yahoo and Yahoo Japan. The deal was announced by a subsidiary of SoftBank Z Holdings. More details here.

Purchase of 40% Robot Developer for Warehouse Automation

In early April 2021, the Japanese company SoftBank announced the acquisition of 40% of the Norwegian developer of robots for automation of warehouses AutoStore. The deal amounted to $2.8 billion, an estimate of AutoStore - $7.7 billion. The deal is expected to close in April 2021. More details here.

Investing in telecom company OneWeb LLC

In mid-January 2021, OneWeb attracted $400 million in investments, which will allow the company to complete by 2022 the launch of another 500 satellites necessary to provide high-quality satellite Internet. OneWeb Group and Hughes Network Systems invested in the SoftBank. More details here.

2020

Hyundai owns 80% of Boston Dynamics, Softbank - 20%

On December 11, 2020, Hyundai Motor Group announced the purchase of Boston Dynamics, in which the American robot manufacturer was valued at $1.1 billion. Softbank has 20% of Boston Dynamics. More details here.

Boston Dynamics sale to Korean automaker Hyundai

Korean automaker Hyundai bought robot manufacturer Boston Dynamics from a Japanese SoftBank. This became known on December 10, 2020. More on this here.

Withdrawal from capital of 22 companies

In mid-November 2020, it became known that the Japanese holding company Softbank withdrew from the capital of more than 20 companies. Among them are such major players as Google, Adobe, Netflix, Microsoft, etc.

According to Softbank's latest financial report, the total value of the company's portfolio at the end of September 2020 amounted to $12.92 billion, a few months earlier the figure was $17.52 billion. There are 4 companies out of 26 left in Softbank's portfolio. Softbank sold shares of Amazon, Alphabet, Adobe, Netflix, Microsoft, Tesla and reduced its stake in Nvidia and T-Mobile US. The Japanese giant also changed positions in Line and Lemonade.

For 3 months, Softbank withdrew from the capital of 22 companies, including Amazon, Tesla, Google, etc.

Speaking about the new investment strategy, Softbank CEO Masayoshi Son noted:

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AI companies are transformed into Internet companies, and Internet companies are transformed into AI companies... the boundaries between telecommunications companies, the Internet and AI will be blurred.
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Son also added:

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We began to invest in listed companies as a kind of pilot project in order to increase the effectiveness of our investment results. We also started using derivative products. But derivatives make up only 1% of our assets.
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As an investor, Son intends to support a revolution involving artificial intelligence technologies and invest in companies that, regardless of their stage of development, really have the potential to develop this industry.

Plans to sell over 2020 Softbank assets worth $41 billion became known at the beginning of the year. Masayoshi Son then said that at least $18 billion will be spent on stock buybacks and debt coverage.[3]

Brightstar Sale

In mid-September 2020, SoftBank announced the sale of the American mobile phone supplier Brightstar, thereby getting rid of the last telecommunications asset in its investment portfolio. The sale of Brightstar will consolidate the transformation of SoftBank into a global investor and asset manager, notes the Financial Times. More details here.

Nvidia bought ARM for $40 billion

On September 14, 2020, Nvidia announced the acquisition of ARM from Japanese holding SoftBank for $40 billion. Under the terms of the deal, which its participants want to close before the end of March 2022, Nvidia will pay $21.5 billion with its shares and $12 billion with its own funds, including $2 billion immediately after the conclusion of the agreement. More details here.

Ex-Softbank employee jailed for transferring data to Russian diplomat

On July 9, 2020, the Tokyo District Court found Yutaka Araki guilty of stealing secret data from his former employer, Softbank, with the aim of subsequently transferring it to a Russian diplomat. More details here.

Ex- SoftBank officer arrested in Japan in the case of espionage in favor of Russia

Japanese police arrested former SoftBank employee Yutaka Araki for stealing confidential information to the operator and transferring it to the Russian authorities. More details here.

2019

Investing in WeWork more than Bolivia's GDP

On October 23, 2019, the new chairman of the board of directors WeWork , Marcelo Claure (MarceloClaure), sent an email to the company's employees in which he said that SoftBank had invested $18.5 billion in the largest coworking service - this is more than GDP Bolivia 11.5 million people live in. More. here

Investing in Uber unmanned vehicles

On April 19, 2019, Uber announced the attraction of $1 billion in investments for its division engaged in the development of technologies for unmanned vehicles. According to the results of the financial transaction, which was attended by Softbank technology holding, Toyota automaker and Denso automotive component manufacturer, Uber Advanced Technologies, was valued at $7.25 billion. More details here.

2018

Investing $500 Million in Cambridge Mobile Telematics Driver Behavior Analysis Software Developer

In December 2018, Cambridge Mobile Telematics announced the attraction of $500 million in investments from SoftBank Corporation, the founder of which is the richest Japanese Masayoshi Son. The money will be allocated from the Vision Fund, which the Japanese holding created to invest in technology projects. More details here.

Investing in Smart Window Developer Managed by View Smartphone

In November 2018, Softbank announced the investment of $1.1 billion in the developer of smart windows View through its Vision Fund. The funds raised are used to double the production of smart windows at a plant in Mississippi (USA), as well as to further develop technology for use in even more futuristic projects. More details here.

Investment in video surveillance system developer EarthNow

In April 2018, Softbank invested in the developer of a real-time video surveillance system for the entire Earth. EarthNow More details here.

2017

Investment in Uber taxi ordering service

Japanese telecommunication the conglomerate SoftBank invests billions dollars in the online taxi ordering service Uber as part of an agreement signed by companies. Uber announced the agreement on November 12, 2017, but did not disclose the details of the transaction. More. here

Purchase of robot developer Boston Dynamics

On June 9, 2017, Softbank Corporation announced the acquisition of robot developer Boston Dynamics. The announcement of this transaction contributed to the rise in buyer quotes by 7.9% to a maximum of 17 years ago. The details are here.

2016: Purchase of ARM chip developer for $32.2 billion - the largest acquisition in the history of the company

On July 18, 2016, SoftBank announced the purchase of ARM Holdings for £24.3 billion ($32.2 billion). This is the largest acquisition in the history of SoftBank.

The value of the transaction per ARM share will be £17, which is 40% more than the share price as of July 15, 2016. After the announcement of the sale of the British chipmaker, his quotes jumped 45% to the opening of the London Stock Exchange, as a result of which the company's market capitalization amounted to 7.56 billion pounds. More details here.

2012

Purchase of American mobile operator Sprint Nextel for $20 billion

In October 2012, Softbank announced its intention to acquire a 70% stake in a mobile operator from USSprint Nextel for $20 billion. If this transaction is successfully completed, it will lead to the formation of one of the largest telecommunications operators in the world.

The agreement will allow Softbank, which aggressively promotes its services, to expand its presence in the US market and become a global force, becoming the third largest telecom operator in the world. The sprint deal will help to get $8 billion of new capital and noticeably improve its financial situation.

"We are now opening up the widest both internal and external opportunities for my entire stay at Sprint," said company CEO Dan Hesse during a news conference in Tokyo. Sprint is not averse to repeating in its home market an ascent similar to that made by Softbank, previously also in third place and far behind the leaders. "Here we have something to learn from them," said Hesse[4].

Masayoshi Son, CEO of Softbank, stated the following:

"You are faced with a variety of risks when dealing with a complex task. And this task in America will not be easy for us. But we believe in our strength. "
Son connects his prospects with the experience of building high-speed networks, which the company managed to acquire in Japan. "In America, networks work much slower, not reaching half the speed that we are used to in Japan," he said. "And in ensuring high speed, we see our chance."

Analysts believe that the deal will shake up the US mobile market, which is dominated today by two major operators: AT&T and Verizon Wireless. Softbank, which received the status of a mobile operator only six years ago, has already doubled the number of its subscribers in Japan, applying an aggressive pricing policy and creative marketing.

The agreement promises cash injections to Sprint, which, like Softbank, is building its own high-speed network. It makes sense to try to introduce in the United States some technologies already successfully used in Japan, for example, specialized payment cards and mobile television. The scale of the new enterprise can also benefit greatly.

By acquiring Sprint, Softbank will probably try to achieve savings through further growth in scale. The main telephone in both companies is iPhone, both use the Ericsson infrastructure.

According to Hesse, Sprint has already concluded successful contracts for the sale of iPhone. These contracts promise to make a profit over the next few years.

In the news coming from Japan, it is said that Softbank management intends to use its position in Sprint to buy MetroPCS Wireless, which at the same time is actively heckling T-Mobile.

Koester Mann, lead analyst at CCS Insight, believes that transactions between Softbank and Sprint, as well as between T-Mobile and MetroPCS, will be positive for US consumers, as the result will increase pressure on Verizon and AT & T.

Purchase of robot manufacturer Aldebaran Robotics

In 2012 Japanese telecommunication , Softbank holding acquired a French robot manufacturer Aldebaran Robotics. The deal amounted to $100 million. More details here.

Competitor takeover - eAccess, reaching second place in the mobile market of Japan

For 2012, Softbank remains the third largest mobile operator in Japan, but in early October an agreement was signed with a small competing company eAccess, after the acquisition of which for $2 billion Softbank will move to second place in the hierarchy in terms of the number of subscribers.

The holding includes (October 2012):

  • divisions of large mobile and broadband operators, as well as
  • Internet assets (in particular, Yahoo Japan and Japanese UStream).

Large funds are invested in foreign firms, including, for example, social gaming provider Zynga and Chinese holding Alibaba Group.

Softbank advertisements featured Brad Pitt and Cameron Diaz, tariff plans explained talking cats to viewers, and in the 2012 advertising campaign there is a Japanese family, the head of which for unknown reasons is a white dog named Otosan. He became famous in Japan.

2008: Pioneer iPhone in Japan

Masayoshi Son presents iPhone in Japan in 2008

The head of the company, Masayoshi, repeatedly expressed his admiration for Steve Jobs and was the first to present iPhone in Japan in 2008. At that time, the Japanese cell phone market boiled in its own juice, offering a lot of locally produced devices that were not sold abroad, and without any of the foreign models popular throughout the rest of the world.

At first, analysts doubted that Japanese consumers would like iPhone. However, over time, they recognized that high-quality goods are created not only within their country, and many local mobile phone manufacturers "entered the tailspin," after which some have not yet recovered.

2006: Purchase of Japanese Vodafone

In 2006, when the Japanese government tried to revive competition in the local telecommunications market, Softbank finally gained the confidence of the authorities to get a mobile operator license - in Japan there was never enough money alone for this. However, despite all Softbank's attempts, it was not provided with more frequencies, so the company instantly grabbed the chance when the leadership of the British operator Vodafone decided to leave the Japanese market. Vodafone appeared in Japan a few years before, having bought the local operator number three, but the European company could not be interested in world-class phones and its services of capricious Japanese subscribers.

Softbank bought Vodafone Japan, and in a matter of months the mobile market received a fresh stream of competition. The company got into big debts for this purchase, but it managed to pay them by selling its stake in Yahoo[5].

2001: Attack on the DSL Internet access market

In 2001 the largest operator YaponiiNippon Telegraph and Telephone (NTT) had to feel shock. NTT just launched an Internet access service using DSL technology, when Softbank crossed its path.

Having gained strength thanks to a series of well-aimed investments in Internet startups, Softbank began to create its own Internet access business, without fear of entering the territory of such a formidable rival as NTT.

Softbank's DSL service debuted at tariffs half that of NTT, forcing the largest operator and other competitors to also knock down prices. Thanks to active investments in the most modern technologies, Softbank managed to offer not only less expensive DSL access in a matter of months, but also the fastest. Softbank's blitzkrieg was accompanied by an aggressive marketing campaign: people on the streets who agreed to connect were offered free DSL modems.

At that time, there was practically no competition in the Japanese telecommunications market. Small independent operators usually offered tariffs only slightly lower than NTT, and lower prices in the eyes of a conservative Japanese consumer were never able to overshadow the stability, scale and reliability with which the NTT name was associated. However, Softbank's offer looked too good to be abandoned.

Since its bold entry into the Japanese DSL access market, Softbank has continued in the same spirit: the company was not afraid to challenge large players and was accustomed to the fact that at first it was not taken seriously. Its main tools were tempting prices and new technologies, and the general director Masayoshi Son did not hesitate to make large financial bets.

2000: Purchase of Ziff Davis Media Company

Among Softbank's first investments is the acquisition of the American publisher Ziff Davis and the formation of a joint venture with News Corp., owned by Robert Murdoch, in an attempt to dramatically change the landscape of the satellite broadcasting market in Japan. Over the following years, Softbank invested in a series of startups and as of October 2012 owns packages of the largest Chinese Internet companies Renren and Alibaba.

1990s: Purchase of 37% from Yahoo

By the mid-1990s, the company accelerated its pace by buying a stake in Yahoo, then a starting company. In a matter of months, Softbank increased its stake in Yahoo to 37% and was able to expand its business due to the confident growth of the shares of the American company.

1981: Masayoshi Son founded a software distributor and publisher of computer magazines

Softbank was founded in 1981 by Masayoshi Son, its permanent leader is a charismatic entrepreneur.

The company began its activities as a software distributor and publisher of computer magazines. For the first decade of its existence, Softbank continued this business, but then began to expand.

Notes