barnyarddog
4 years ago
One Day After Zero Hedge, FT "Unmasks" SoftBank As Call-Buying "Nasdaq Whale"
by Tyler Durden
Sat, 09/05/2020
How much did SoftBank buy? According to the WSJ, which also moments ago confirmed our original reporting, SoftBank...
... spent roughly $4 billion buying call options tied to the underlying shares it bought, as well as on other names
... which due to the embedded leverage in options, is the equivalent of buying tens if not hundreds of billions of underlying stocks, thus sparking the massive upward move in the handful of tech stocks which then spilled over everywhere.
And speaking of underlying stocks, in Q2 SoftBank just so happened bought brand new stakes in all the super high beta names including Amazon, Google, NVidia, Tesla, Netflix, Zoom and so on.
https://www.zerohedge.com/markets/one-day-after-zero-hedge-ft-unmasks-softbank-call-buying-nasdaq-whale
mick
7 years ago
SoftBank Group Corp. invested $300 million in WeWork Cos., a person familiar with the matter said, an influx of cash that values the New York-based coworking giant at more than $17 billion.
The investment from SoftBank is the first in what will probably be a much larger stake, said the person, who asked not to be identified .
The additional cash is expected to come from the $100 billion Vision Fund. With the new money, WeWork's valuation increases to about $18 billion, according to an estimate by private stock market provider Equidate.
WeWork, which rents out desks and offices to small businesses, freelancers and other people seeking temporary working space,
sold the shares at a higher price than in its previous round,
which valued it at about $16 billion a year ago.
The new investment was disclosed in a securities filing. WeWork and SoftBank declined to comment. SoftBank's investment was reported
earlier Monday by the Wall Street Journal. The Japanese firm plans
to invest $3 billion or more in total, CNBC said last month.
More from http://www.Bloomberg.com: Comey Deals Trump a Political
Blow When He Can Least Afford It
SoftBank founder Masayoshi Son is in the process creating the $100 billion fund,
a bet on the Japanese billionaire's vision for a future centered on artificial intelligence and connected devices.
One of its first investments will be an acquisition of a 25 percent stake in ARM Holdings Plc,
a wholly-owned unit of SoftBank,
people familiar with the matter have said. Son has also said the SoftBank-led $1.2 billion investment in satellite startup OneWeb Ltd. will be included in the Vision Fund when it closes.
The shares of SoftBank traded 2.1 percent lower as of 10:23 a.m.
in Tokyo on Tuesday.
The stock, which is up about 6 percent this year,
has been buoyed by the prospects of the Vision Fund easing the
strain on the Japanese conglomerate's balance sheet.
Son's appetite for deals has left SoftBank with a record $130 billion debt load, one of the heaviest in Japan.
More from Bloomberg.com: Italy’s Struggling Economy Has World’s Healthiest People
SoftBank said it will contribute $25 billion to the fund,
while Saudi Arabia is putting in $45 billion.
Abu Dhabi's Mubadala Development Co. will invest as much as
$15 billion and should reach a formal agreement by the end of this month, people familiar with the matter have said. Apple Inc.,
Qualcomm Inc. and Oracle Corp.
Chairman Larry Ellison may invest $1 billion each, people familiar with the matter have said.
Updates with details on Vision Fund.
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Read SoftBank Invests $300 Million in WeWork on http://www.bloomberg.com
mick
8 years ago
reading/Why Softbank Is Buying ARM for $32B
By Steve Tobak Published July 22, 2016 ValleyBeat FOXBusiness Opens a New Window.
http://www.foxbusiness.com/features/2016/07/22/why-softbank-is-buying-arm-for-32b.html
Since founding Softbank in 1981, Masayoshi Son has been known to take enormous risks, most of which have paid off.
Today, he’s chairman and CEO of a global telecom and Internet giant valued at close to $60 billion and is the second richest man in
Japan with a personal net worth of $17 billion.
On Monday, the company announced a bid which is probably the biggest
bet of Son’s life,
its plan to acquire British microprocessor firm ARM Holdings for $32 billion. ARM’s technology can be found in nearly every smartphone, tablet and mobile device on Earth.
Its microprocessor has long been the gold standard for low power
designs essential for mobile applications.
The question is, what’s that got to do with Softbank’s core business
as a wireless and Internet service provider? Acquiring most of Sprint for $20 billion in 2013 was risky enough,
but at least the goal was clear:
to turn around the struggling company and gain a foothold in the U.S. wireless market.
What’s Son’s plan with respect to the ARM deal?
Where are the strategic synergies required for acquisitions to make sense?
Those questions clearly spooked investors,
who drove shares of Softbank down more than 10% this week.
There may not be synergies and the goal may not be obvious,
but that doesn’t mean Son doesn’t have a bold vision of where the
world is heading. And he aims to make sure Softbank is right smack
in the middle of the action.
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Son sees a future where machines are smarter than people and
everything is connected. So he’s betting big on
artificial intelligence (AI) and the Internet of Things (IoT).
And he believes that ARM’s ubiquitous microprocessor Opens a New Window.
architecture is well positioned to dominate that brave new world
and find its way into a trillion chips, someday.
That’s not as far-fetched as it sounds. A
RM doesn’t actually make chips, but licenses its microprocessor
designs to a who’s who of semiconductor and device makers,
from Intel and Qualcomm to Apple and Samsung, for an average of
about ten cents per chip.
As a technology company with no manufacturing, ARM is enormously profitable and scalable.
And Son plans to invest heavily to accelerate its penetration
into exciting new applications like intelligent robots,
smart cars and connected appliances.
Skeptical analysts have correctly noted that there’s a lot of
missing technology between a processor designer like ARM and a
service provider like Softbank,
but Son has been busy acquiring Opens a New Window. ,
partnering with and buying stakes in companies that are developing
the core software, communications and security technology needed to
fill those gaps and pull all the pieces of the puzzle together.
One of the sources of confusion over the ARM acquisition is its purpose.
Some media outlets are reporting that Softbank is betting on IoT.
Others describe it as a bet on AI. Son needs to do a better job of helping them connect the dots: IoT and AI are actually connected
in a fundamental way.
IoT is about integrating tiny sensors, processors and radios into everything from livestock and thermostats to clothing and vehicles.
A good analogy is that IoT is like the senses of the human body.
AI, on the other hand, is about making machines capable of learning
from the information they receive and making good decisions.
AI is like the human brain. The human senses and brain work together.
It’s the same in the physical world. After all, what would be the
point of making billions of things smart enough to sense their surroundings and communicate that information to the cloud,
the fog or wherever it needs to go, if machines aren’t intelligent enough to absorb all that big data and make smarter and faster
decisions than humans can?
Autonomous cars will be far safer than those driven by people for
one simple reason:
the machine can assimilate real-time information
from thousands of sensors communicated over its own high-speed
network and make nearly instantaneous decisions much quicker and
more accurately than a human can.
Hospitals will someday be able to detect, disinfect and if necessary, quarantine areas on their own.
They will efficiently deploy surgeons, nurses and equipment because they’ll know exactly where everyone and everything is at any given moment.
And the implications for advanced surgical techniques are already being realized.
Those same advantages of billions, maybe someday trillions of smart things communicating information to machines with advanced learning
and decision-making capability will find their way into every application you can think of, from agriculture and energy grids to
smart highways and air traffic control.
And Son believes that, with his backing,
ARM microprocessors will be well positioned to dominate those markets
as it now dominates in mobile.
The British company’s technology is a key piece of the puzzle that comprises Son’s vision of the future.
That’s what Softbank’s acquisition of ARM is about.
mick
8 years ago
SoftBank’s Surprise Purchase of ARM Could Have Major Ripple Effects
SoftBank could spend heavily to make ARM's processor designs more competitive with Intel's. And it might also start to charge more for them.
https://www.thestreet.com/story/13643111/1/softbank-rsquo-s-surprise-purchase-of-arm-could-have-major-ripple-effects.html?puc=yahoo&cm_ven=YAHOO
It involves a Japanese conglomerate whose most valuable assets are investments and controlling stakes in telecom carriers and Internet services firms acquiring the world's dominant provider of CPU core designs. Don't try to decipher what major synergies exist between ARM and SoftBank properties such as Sprint (S) , Japanese mobile carrier SoftBank Corp. and gaming company GungHo Online -- they don't exist.
The purchase isn't about synergies, but is rather a large one-off bet -- made easier because of the pound's post-Brexit decline -- by mercurial SoftBank chief Masayoshi Son. Son's wager is that owning a company that has a near-monopoly position on the licensing of microprocessor core designs to chipmakers, and also supplies GPU core designs and other complementary intellectual property, will pay dividends as the number of devices and subsystems featuring embedded processors -- including those falling under the Internet of Things (IoT) label -- keeps growing, and the computing needs of existing intelligent devices keep rising.
The deal is also one that's unlikely to yield a rival bid from a chip developer, due both to the price tag and because ARM's business model has required it to be the industry's Switzerland.
If Intel (INTC) , for example, tried to acquire ARM, not only would regulators probably object, but many of the ARM licensees who happen to be Intel rivals -- the list includes
Qualcomm (QCOM) ,
Broadcom (AVGO) ,
Marvell (MRVL) and many others -- would start weighing alternatives.
Likewise, if Apple, whose A-series processors feature custom ARM cores, tried to buy ARM, Samsung (SSNLF) ,
Huawei and just about every other Android OEM would get nervous, given that their phones and tablets are powered by chips containing ARM cores.
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Judging by initial remarks from SoftBank and ARM,
as well as SoftBank's history, the deal could be a negative for Intel, as it may result in ARM significantly boosting its R&D spending,
and thus helping licensees squaring off against Intel in markets such as server CPUs, network processors and IoT chipsets field more competitive solutions.
It could also be a negative for U.K.-based
Imagination Technologies (IGNMF) ,
which competes against ARM in the GPU core market.
Perhaps with an eye towards pleasing British politicians and regulators, SoftBank says it plans to "at least double" ARM's U.K. headcount over the next five years, while also increasing ARM's non-U.K. headcount.
Moreover, after closing past acquisitions such as
Sprint and Vodafone K.K. (now SoftBank Corp.),
SoftBank has spent heavily to improve the competitiveness of the acquired companies. Chances are it'll look to do the same with ARM.
But the deal might not entirely be good news for ARM licensees, if SoftBank tries to justify the steep price it's paying for ARM by boosting the licensing fees and royalty rates ARM charges for use of
its IP. The royalty rates are especially worth watching, given that ARM,
in spite of its near-monopoly position, has typically received just pennies for each chip using its cores.
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In the first quarter, the company recorded processor royalty revenue of $191.9 million from the shipment of 4.1 billion ARM-powered chips in the fourth quarter. That spells an average royalty of just 4.7 cents per chip, even though many of those chips featured multiple ARM cores.
If SoftBank tries to up that figure to, say, 7 or 8 cents per chip, that could ding the margins of ARM licensees a bit.
But given the ubiquity of ARM's CPU architecture and the massive ecosystem that has formed around it, chances are that licensees will grin and bear it.
mick
8 years ago
SELLING GAMER ????? MISTAKE ????? I THINK SO/ China's Tencent Wants 'Clash of Clans' Maker Supercell: Report
Tencent already has a leading PC gamemaker and Supercell owner Softbank needs cash.
https://www.thestreet.com/story/13609116/1/china-s-tencent-wants-clash-of-clans-maker-supercell-report.html?puc=yahoo&cm_ven=YAHOO
China's Tencent Holdings is reportedly close to a deal for Supercell, the Finnish maker of "Clash of Clans", that would cement the Internet company's position atop gamemakers and continue China's run on targets around the world.
Tencent is in talks to buy a majority of Supercell from Japanese mobile phone company Softbank with the help of financial investors including Beijing-based Hillhouse Capital, the Wall Street Journal reported citing unnamed sourced. The approach values Supercell at $9 billion.
Chinese companies generally and Tencent in particular have been spending billions to heed a call from president Xi Jinping to bolster the country's slowing economy with purchases abroad. Earlier this week China's Xiwang Foodstuffs agreed to buy Canadian supplement company Iovate Health Sciences International for $700 million and Tencent in 2011 bought control of Los Angeles PC gamemaker Riot Games for about $230 million.
The Supercell agreement carries a number of stipulations and may not close, the Journal reported. Any buyer would have to guarantee control of the company would remain in the hands of its six founders. Buyers would also be prohibited from listing the company or making significant management changes.
Financing is also reportedly an issue.
Neither Tencent nor Softbank could immediately be reached for comment.
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Supercell leapt into the forefront after its founding in 2010 by exploiting explosive interest in smartphones with games such as "Clash of Clans" and the farming simulator "Hay Day". The company's newest game, "Clash Royale", topped gaming charts for Apple (AAPL) devices in March in the U.S, Germany and Brazil and brought in $80 million, according to game research company Newzoo.
The success of its games has made Supercell very lucrative. The company had net profit €693 million last year on revenue of €2.11 billion.
Softbank likely wants to sell the company as part of its efforts to lessen its $80 billion debt pile, about a third of which is left over from its 2013 acquisition of U.S. cellular company Sprint (S) for $21.6 billion.
It's also arranged a deal to sell its majority stake in game publisher GungHo Online Entertainment to that company. Softbank is also selling an additional $1.1 billion of its stake in Chinese online company Alibaba Group Holding (BABA) , bringing the total size of its Alibaba selldown up to $10 billion.
Softbank held 32.2% of Alibaba's issued and outstanding shares at the end of March, and had previously said that the initial sale of $7.9 billion announced last Wednesday would bring that stake down to 28%.
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mick
8 years ago
SFTBF/ SoftBank Investors Call for Internal Probe of No. 2 Arora
Peter Elstrom
pelstrom
Pavel Alpeyev
pashakun
http://www.bloomberg.com/news/articles/2016-04-21/softbank-investors-call-for-internal-probe-of-president-arora-in9tcg8v?cmpid=yhoo.headline
Shareholders sent letters to board of SoftBank, Sprint unit
SoftBank says Arora has done nothing wrong, no new information
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A group of investors in SoftBank Group Corp. has called on the board to investigate and possibly dismiss Nikesh Arora, the company’s second in command, in a sharply critical, 11-page letter that questioned his track record and qualifications as president and heir apparent to billionaire founder Masayoshi Son.
The request came in a letter to SoftBank’s board dated Jan. 20 from the American law firm Boies Schiller & Flexner and signed by Matthew Schwartz, a partner at the elite New York firm, without identifying the shareholders or how much stock they own.
The critique of Arora, which hasn’t been made public, questions whether the executive has conflicts of interest due to his existing role as a senior adviser to the private equity firm Silver Lake. It also suggests he may have been involved in past wrongdoing and generally poor business decisions. A separate letter from one investor to the board of Sprint Corp., which SoftBank controls, asks for his removal as a director there for similar reasons.
In addition to these allegations, the investors criticized Arora’s allegedly "poor investment performance and a series of questionable transactions" during his tenure. "Despite these issues, the SoftBank board saw fit to make Mr. Arora the third-highest paid executive in the world without any track record of accomplishment at the company," wrote Schwartz.
The investors are demanding that the boards at SoftBank and Sprint conduct "an internal investigation" by an independent firm. “We believe that an independent investigation will establish compelling grounds for the boards of SoftBank and Sprint to dismiss Mr. Arora from his executive and board positions.”
SoftBank denied that Arora has done anything wrong and called the letter “unsubstantiated allegations” from “unidentified shareholders.” The Tokyo-based company said it vets any potential conflicts in Arora’s investment decisions and has complete confidence in his management. It said the board is in the process of reviewing the letter. “I have complete trust in Nikesh and one thousand percent confidence in him and know he will continue to do great things for SoftBank in the future,” Son said in a statement. Sprint declined to comment.
Arora said he has worked hard to help SoftBank since joining the company from Google Inc. and has been careful to share any information that would present a potential conflict. “I think my track record speaks for itself,” he said. “Since my time at SoftBank, the last 18 months, I always strived to put the company first and I think none of the comments have any substantive bearing in fact.” He also said he may end the advisory role at Silver Lake when his current contract expires.
The investors are targeting one of the most successful executives in Silicon Valley. The 48-year-old is considered a star at SoftBank. At Google, Arora worked for a decade at the search giant, rising to become the top sales executive and later chief business officer. He joined SoftBank in 2014 and was promoted to president about a year later. Son, 58, called Arora the most likely candidate to succeed him.
Arora has also made an enormous personal bet on the future of SoftBank. Last August, he said he would buy 60 billion yen of the company’s shares, worth $483 million at the time. That was the largest insider purchase by an executive in Japan for at least 12 years.
“Picking on Nikesh’s performance seems entirely arbitrary,” said Atul Goyal, an analyst at Jefferies Group. “I’m inclined to trust Masa’s judgment and Nikesh has already shown his commitment with the share purchase.”
SoftBank’s shares were hit last year by struggles at Sprint and Alibaba Group Holding Ltd., its two most valuable holdings. The stock has bounced back almost 40 percent since Feb. 15, when SoftBank said that it would repurchase as much as 500 billion yen of its own shares. SoftBank’s stock is down about 20 percent since Arora joined the company.
SoftBank shares fell as much as 5 percent Thursday after the letter was disclosed, before closing 1.4 percent higher at 6,088 yen.
Swiss Investor
One of the investors challenging Arora is Nicolas Giannakopoulos, a 46-year-old Swiss national. He said that his firm holds a bit more than $100,000 of shares of SoftBank and Sprint. Giannakopoulos said he is offended by Arora’s ethics and a history of deal-making he views as self-serving. “This is a kind of person, a kind of manager, who has no place in this world,” said Giannakopoulos.
He would not comment on the identity of any other investors, how broad the investor group is or how many shares they own. He said he is paying part of the fees for the services of Boies Schiller, whose name partner, David Boies, led the U.S. Justice Department’s antitrust case against Microsoft Corp. and Al Gore’s Supreme Court case over the 2000 presidential election results. Other investors are paying their share of the legal fees, Giannakopoulos said.
Schwartz, the Boies Schiller attorney, said that SoftBank has not responded to his letter. “We are actively considering our next steps,” he said. The letter says that if the boards of SoftBank and Sprint do not announce an investigation within 60 days the investors intend to pursue other remedies, including potential legal action and giving information to government regulators. The 60-day period ended last month.
The letter alleges three broad areas of concern: conflicts of interest that suggest Arora may put his personal interests ahead of those of SoftBank; poor performance in making investments for SoftBank; and excessive compensation at the company without sufficient disclosure.
The conflict-of-interest allegations center on Arora’s role as a senior adviser at Silver Lake, a position he has held since 2007 when he worked at Google. The letter contends that Arora is getting compensated by the firm for helping with potential technology company investments that are similar to the investments he is supposed to be making for SoftBank. “This dual role has the potential to reward Silver Lake to the detriment of SoftBank,” Schwartz wrote.
Silver Lake
SoftBank said that it is aware of Arora’s involvement with Silver Lake and takes care to thoroughly vet any potential conflicts. If investments present potential problems, they are examined by top executives, including Son. The company said it is comfortable with Arora’s position as a Silver Lake adviser and that SoftBank benefits from his involvement there. A spokeswoman for Silver Lake declined to comment.
Arora said that his involvement with Silver Lake has been minimal since he joined SoftBank and that any information he gets from the firm is limited to only what he needs to know for specific potential investments. He estimates that he has spent a total of 10 to 20 hours on the position in the last year.
The investor letter contends that Arora’s investment track record has been “lackluster” with a lack of proper due diligence. It cites two specific deals: SoftBank’s investment in an online video site called DramaFever and another investment in an Indian real estate portal named Housing.com. In both cases, the startups ran into trouble shortly after SoftBank put in money, according to the letter.
SoftBank said the business of backing startups, which Arora leads at the company, is by nature high risk and that failures are to be expected. Picking two deals that have had trouble says little about the overall rate of success, it said. The company said it is satisfied with Arora’s strategy and that other startups he has backed, including India’s Snapdeal, have thrived.
“It is entirely premature to evaluate an investment track record after 18 months; SoftBank is a long term investor,” said Paul Kranhold, a spokesman for SoftBank.
Arora also said it is too early to judge how his team’s portfolio of investments will do. In cases where startups have run into challenges, he said he has taken swift action to address them and then move forward.
The third area of concern cited in the letter is Arora’s compensation. In June, the company said it paid him 16.6 billion yen for the seven months of the previous fiscal year that he had worked, the highest pay package on record in Japan at the time. The letter called that “alarming and intolerable” given that shareholders have seen no benefit yet from his joining SoftBank.
SoftBank said Arora’s compensation was reasonable given his skills and experience. It also said that part of his pay was a signing bonus. It is common for executives changing companies to be compensated for stock options from their old companies that they will forgo. Arora held unvested Google stock options and other securities worth more than $76 million at the end of 2013, according to the last proxy statement before his departure.
“Without hard evidence, this will probably be dismissed by the analyst and investor community as groundless,” said Goyal of the letter. “Jury is still out, but perhaps Masa Son made the right decision with Arora.”
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