InvestIdeas

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SoftBank Rises After Selling Alibaba Shares For The First Time; Alibaba Slips

By Shuli Ren

SoftBank (9984.Japan/SFTBY) rose 1.6% this morning, outperforming the Nikkei 225‘s 0.9% loss, after announcing that it will sell at least $7.9 billion of shares in Alibaba Group (BABA).

This is SoftBank’s first sale since it invested in Alibaba in 2000. SoftBank will cut its stake from 32% to about 28%, the company said. Alibaba slipped 2.3% in after-hours trading.

It is time for SoftBank to cash out on its many savvy investments, because the Japanese Internet conglomerate has become a value trap.

SoftBank has 10 trillion yen market cap, but its holdings in Alibaba alone is worth 7.2 trillion yen.

Don’t forget SoftBank owns all sorts of assets, including its cash cow domestic telecom business, a 1.2 trillion yen stake in Yahoo Japan (4689.Japan), and a majority stake in Sprint (S).

Source: Barron's Asia

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SoftBank Said to Plan More Sales to Bolster Finances

by Pavel Alpeyev and Takashi Amano

Technology company may divest more assets to raise cash
Nikesh Arora leading efforts to improve company’s finances

SoftBank has already indicated that games aren’t a core part of its business, and may consider a sale of its 26 percent stake in Japan’s GungHo Online Entertainment Inc., the person said.

SoftBank is already in talks to shed its investment in Finnish game-maker Supercell Oy, people familiar with the matter have said.

President Arora, a former Google executive, is balancing SoftBank’s spending on growth with its 11.9 trillion yen ($108 billion) debt load.

SoftBank has plenty of other holdings in listed companies totaling almost 10 trillion yen. That includes 1.22 trillion yen of Yahoo Japan Corp.’s stock and a 33 billion yen stake in China’s Renren Inc.

SoftBank’s shares in money-losing Sprint Corp. are worth about 1.4 trillion yen, roughly 600 billion yen less than what the Japanese company paid for the U.S. carrier in 2013.

SoftBank’s net debt was at a record 9.35 trillion yen as of March 31, four times the amount before the $22 billion Sprint acquisition. The company sold more than $8 billion in corporate bonds last fiscal year. That included $1 billion in dollar bonds paying a coupon of 6 percent. SoftBank also announced in February it will spend as much as 500 billion yen buying back more than 14 percent of its stock.

Cashing in on earlier, successful investments may also help SoftBank close the $22 billion gap between the company’s market value and the worth of its listed shareholdings.

Source: Bloomberg


http://www.bloomberg.com/news/articles/ ... ance-sheet

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May 10, 2016

SoftBank books 8.8 pct FY profit rise after cost-cuts at Sprint unit

Operating profit rose 8.8 percent in the just-ended business year, a tad short of analyst estimates, pushed up by robust domestic operations and cost cuts at U.S. subsidiary Sprint Corp.

SoftBank's earnings are susceptible to the performance of Sprint, which accounts for about 40 percent of group revenue.

SoftBank owns 83 percent of Sprint. The fourth-ranked U.S. mobile network provider forecast operating profit for the year through March 2017 at $1 billion to $1.5 billion, from $310 million in the just-ended year, through more cost and job cuts.

Source: Reuters


http://finance.yahoo.com/news/softbank- ... NlYwNzYw--

Japan's SoftBank plans to sell $7.9 billion in Alibaba stock to cut debt

BY MAKIKO YAMAZAKI AND NAROTTAM MEDHORA

SoftBank had interest-bearing debt of 11.9 trillion yen ($107 billion) as of end-March, including 4 trillion yen at Sprint.

Its debt-equity ratio stands at 4.56, much higher than the industry median of 0.32

Source: Reuters

http://www.reuters.com/article/us-aliba ... the%20Bell

SoftBank Sells More Alibaba Shares, No Plan To Buy Yahoo

By Shuli Ren

Singapore’s sovereign funds GIC and Temasek bought $500 million each, totaling $1 billion.

Alibaba said it prefers “not to go into a net debt position.” As of the March quarter, the company had $16 billion cash and just over $10 billion debt. It has enough cash to buy back the $2 billion shares.

Alibaba also said its management is required to hold that $400 million shares for at least 6 months because they are “restricted stocks”.

SoftBank will still hold 28% of Alibaba’s shares and will not sell any more shares for 6 months.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... buy-yahoo/

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Japanese Stocks to Buy Against the Grain: Softbank Corp. (Japan) (SFTBY)

Japanese people are generally not known for being brash and outspoken as such behavior is considered socially unacceptable.

This is the enigma of Softbank Corp. (Japan) (OTCMKTS:SFTBY) CEO Masayoshi Son. Often called the “Bill Gates of Japan,” Son is as unique as he is bold. Born into a Korean immigrant family, he quickly established himself as a rebel with a razor-focused cause.

He is exactly what Japan needs.

SFTBY, like its eccentric CEO, is a risk-taker. Late last week, the government of Saudi Arabia and Softbank announced a partnership to “create a technology investment fund that could grow as large as $100 billion,” according to Reuters.

The move is a win-win for both parties. Riyadh has an opportunity to shift its leverage towards a deflated oil market, while SFTBY can gain a significant foothold on the “Internet of Things.”

It’s no surprise, then, that Softbank is handily beating most Japan stocks. Year-to-date, SFTBY shares are up 27%. Furthermore, the company shows no sign of ending its acquisitive hunger.

Softbank has its hands in everything cool and hip, from e-commerce to ride-sharing apps. SFTBY also engineered Japan’s biggest foreign business deal when it bought out British semiconductor firm Arm Holdings.

To put it bluntly, SFTBY is doing what Japanese stocks should have been doing all along.

Source: Investor Place

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SoftBank to route big investments via giant tech fund to control debt

By Makiko Yamazaki

SoftBank Group Corp (9984.T) plans to make future large-scale investments via an upcoming $100 billion tech fund it is establishing rather than on its own to avoid growing already bloated debt at the Japanese telecoms and technology company.

Founder and CEO Masayoshi Son is steering SoftBank, a diverse company that holds stakes in U.S. carrier Sprint (S.N), Chinese e-commerce giant Alibaba (BABA.N) and other firms, towards cutting-edge tech investments as the telecoms services markets mature, saying he aims to make the firm the "Berkshire Hathaway of the tech industry".

As part of that gameplan, SoftBank bought UK chip designer ARM Holdings, Britain's most valuable technology company, for $32 billion this year, and announced with Saudi Arabia the planned creation of an investment fund that could grow up to $100 billion.

Some of SoftBank's moves have caused concern among analysts, as it is wrestling with a 13.7 trillion yen ($131 billion) debt pile.

Son said at an earnings briefing on Monday that future investments exceeding "several tens of billions of yen" will be made through the tech fund to avoid a further expansion of SoftBank's debt.

"Our investments were previously confined to our balance sheet," Son said. "By creating the new fund, we would be better positioned to leverage the coming opportunities."

SoftBank's leverage multiple is expected to drop to 3.5 from the current 4.0 within "several years", backed by the company's domestic telecommunications business which is expected to generate annual cash flow of about 600 billion yen, he said.

The ARM acquisition is the beginning of the company's transformation, Son said, adding he is "aiming to become a Warren Buffett in the tech industry". Billionaire Buffett runs conglomerate Berkshire (BRKa.N).

SoftBank expects to invest over the next five years at least $25 billion in the tech fund, which would be one of the world's largest private equity investors and a potential kingpin in the technology industry.

On Monday, SoftBank reported a 6.8 percent rise in second-quarter operating profit to 335 billion yen, thanks to a strong showing by the cash-cow domestic telecommunications business. That compared with a 287 billion yen average estimate from two analysts, according to Thomson Reuters Starmine.

Sprint, owned 83 percent by SoftBank and a long-time drag on SoftBank's earnings, is also showing signs of improvement. It reported a return to operating profit in the latest quarter, strong net additions in postpaid phone subscribers and a record-low cancellation rate. Sprint also raised the full-year outlook for operating profit.

"Sprint was a drag on the group's earnings, but I'm confident that it will be the biggest contributor to our profit growth," Son said.

Source: Reuters

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SoftBank: Lots More To Go… Macquarie Sees 30% Upside

By Shuli Ren

SoftBank (9984.Japan/SFTBY) reported a 71% jump in operating profit for the December quarter as Sprint‘s (S) turnaround seemed to be gaining traction.

While revenue at SoftBank was little changed from a year ago, operating profit came in at 295 billion yen, compared with 172 billion yen last year.

Macquarie Research was so confident of SoftBank’s operating metrics this year that the Australian investment bank raised its price target to 11,550 yen per share ahead of SoftBank’s earnings.

The key reasoning? SoftBank’s three investments – Sprint, Alibaba (BABA) and Yahoo Japan (4689.Japan/YAHOY) – account for over 60% of the valuation of the Japanese conglomerate.

While SoftBank has risen only 11.8% this year, Alibaba has gained 14.8% and Yahoo Japan, a joint venture between SoftBank and Yahoo (YHOO), has soared 17.4% on the back of strong advertising sales growth.

Macquarie’s David Gibson wrote:

Sprint getting started: Post 1Q results our US Telco Analyst Amy Yong has updated forecasts for Sprint and raised TP to US$11 per share noting management are incentivised to keep the share price up while operationally the results were better than expected and has a stronger outlook.

T- Option: Softbank President’s recent meeting with US President Trump highlights the company’s strong potential in the USA, in particular for the merger of Sprint and T-Mobile. Sprint management recently admitted that pairing up with T-Mobile “may be necessary to compete”. Amy thinks a merger could realise US$10bn in opex/capex savings across the two companies.

Alibaba upside: Our China Internet Analyst Wendy Huang thinks Alibaba is poised to expand as outlined in her recent report –“Re-defining the retail”. Wendy has Alibaba as her top pick in China’s internet space.

For details on a potential merger between Sprint and T-Mobile (TMUS), see Barron’s colleague Emily Bary’s “A T-Mobile/Sprint Merger Could End Wireless Brawl“

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... 30-upside/

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SoftBank Group Quarterly Operating Earnings Grow Over 20%, Beating Estimates

SoftBank Group announced the result for the first half fiscal year ended 30 September 2017.

During the period, net profit attributable to shareholders plunged 86.6% yearly to JPY102.622 billion (about US$893 million); diluted EPS amounted to JPY84.97; net sales rose 3.3% yearly to JPY4.41 trillion (about US$38.377 billion); operating profit rose 35.1% yearly to over JPY874.8 billion (about US$7.611 billion).

The dividend payout in the second fiscal quarter was JPY22, and the company expected the full-year dividend payout can remain at JPY44.

For the second fiscal quarter ended 30 September, net profit attributable to shareholders plunged about 81% yearly to JPY97.101 billion (about US$845 million); net sales rose about 3.7% yearly to nearly JPY2.23 trillion (about US$19.35 billion), in line with estimates.

Operating profit rose over 20.5% yearly to JPY395.566 billion (about US$3.441 billion), higher than market expectation of JPY322 billion (about US$2.801 billion).

Source: AAStocks Financial News

Where Softbank Founder Masayoshi Son Is Placing Big Bets

Softbank founder Masayoshi Son is placing big bets on artificial intelligence applications from
chips to cars to workplace chats. He'll likely need more than one $100 billion fund to do it.

By Chris Nolte

25% stake in ARM Holdings plc worth $8.2 billion.

In August, SoftBank transferred a stake in Nvidia Corp. (NVDA - Get Report) to the Vision fund. The chipmaker develops technology for self-driving cars and machine learning. The stake is reportedly worth $4 billion.

SoftBank made a similar transfer of shares in Internet of things and automotive chipmaker Arm Holdings Plc to the Vision Fund in March.

And Son furthered the fund's smart car holdings in October by leading a $164 million investment in mapping company Mapbox to that will help the company build out its in-car navigation and autonomous driving units, among other uses.

Source: The Street

https://www.thestreet.com/story/1440869 ... yptr=yahoo