Jurgis Posted July 18, 2016 Share Posted July 18, 2016 Wow. On one hand, I like this better than a lot of money losing unicorns. On the other hand, the price is high, the business is competitive even with all ARM moat. Moat is there though it has to be carefully managed. I'll repeat myself 8) but this one of my big mistakes of omission in the past: not buying and holding tons of ARM in 2003 or so. Bought some, sold at minor gain or wash. Stupid me. They should have bought ARM years ago. At least instead of Sprint. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted July 19, 2016 Share Posted July 19, 2016 Would someone be so kind as to share the latest SOTP analysis on this name? Thank you very much in advance! Link to comment Share on other sites More sharing options...
ccplz Posted July 19, 2016 Share Posted July 19, 2016 Before Transaction 28% of Alibaba: 57b 43% of Yahoo JP: 11b Total Investment Assets: >68b Operational Assets 80% of Sprint: 16b Core Business: 6.61 EBIT x10=66b Total Operational Assets: 82b Cash from end of FY 2015: ~24b Cash from Gungho/Alibaba/Supercell sales: 21b Total Cash: 45b Value of Assets: 195b Debt: 89b Value of equity: 106b USD Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 3, 2017 Share Posted January 3, 2017 Qualcomm to Invest in SoftBank’s New Technology Fund SoftBank Vision Fund is expected to reach its $100 billion goal http://www.wsj.com/articles/qualcomm-to-invest-in-softbanks-new-technology-fund-1483455690 Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 15, 2017 Share Posted February 15, 2017 Did not see this coming.... SoftBank to buy Fortress Investment for $3.3 billion http://www.reuters.com/article/us-fortress-inv-glo-m-a-softbank-group-idUSKBN15T333 Link to comment Share on other sites More sharing options...
villainx Posted February 15, 2017 Share Posted February 15, 2017 Me too. Son is very unpredictable, but SoftBank transformation has been ongoing for awhile, any thoughts of historic precedent, I'm thinking of LUK a bit, but Fortress is ... something different. Link to comment Share on other sites More sharing options...
mhdousa Posted February 15, 2017 Share Posted February 15, 2017 Denali Investor presentation on Softbank: https://drive.google.com/file/d/0B7gFFwwDJPZYcm5weUJLc1ExR0U/view Transcript of presentation: https://drive.google.com/file/d/0B7gFFwwDJPZYWlNrU3VDeWgzM3M/view Link to comment Share on other sites More sharing options...
Guest ajc Posted February 16, 2017 Share Posted February 16, 2017 Denali Investor presentation on Softbank: https://drive.google.com/file/d/0B7gFFwwDJPZYcm5weUJLc1ExR0U/view Transcript of presentation: https://drive.google.com/file/d/0B7gFFwwDJPZYWlNrU3VDeWgzM3M/view I would've liked some deeper discussion about Cainiao and PayTM for Alibaba. As well as Coupang, Grab, Oyo, and Freecharge on the Softbank side. For example, Cainiao delivers twice as many packages as UPS per day and Alibaba are opening the service up to do parcel logistics for anyone. UPS has a market cap of $100B. Not an apples to apples comparison, but worth considering. Same goes for those other names. Anyway, it was an interesting read. Some of the points, especially about Son's media image versus his actual approach to debt, were very insightful. Thanks. Link to comment Share on other sites More sharing options...
giofranchi Posted February 16, 2017 Share Posted February 16, 2017 Denali Investor presentation on Softbank: https://drive.google.com/file/d/0B7gFFwwDJPZYcm5weUJLc1ExR0U/view Transcript of presentation: https://drive.google.com/file/d/0B7gFFwwDJPZYWlNrU3VDeWgzM3M/view Thank you for posting! Very interesting presentation! Cheers, Gio Link to comment Share on other sites More sharing options...
giofranchi Posted February 18, 2017 Share Posted February 18, 2017 I have opened a relatively small position in SoftBank. I think of it as a "technology index fund of the East". And it is the best way imo to get a piece of both Alibaba and ARM, two great companies. Compared to a SOTP valuation its share price is still very cheap. Of course, there is the debt issue: but much of it is in Sprint and Sprint is starting to make a positive EBIT and it will probably grow and improve it from now on. Second, there is SoftBank's public stocks portfolio, which is about the same size of its debt. Therefore, Masayoshi Son says that SoftBank is effectively net debt zero. Cheers, Gio Link to comment Share on other sites More sharing options...
abyli Posted February 18, 2017 Share Posted February 18, 2017 I have opened a relatively small position in SoftBank. I think of it as a "technology index fund of the East". And it is the best way imo to get a piece of both Alibaba and ARM, two great companies. Compared to a SOTP valuation its share price is still very cheap. Of course, there is the debt issue: but much of it is in Sprint and Sprint is starting to make a positive EBIT and it will probably grow and improve it from now on. Second, there is SoftBank's public stocks portfolio, which is about the same size of its debt. Therefore, Masayoshi Son says that SoftBank is effectively net debt zero. Cheers, Gio Why not just buy baba stock then? Link to comment Share on other sites More sharing options...
Guest ajc Posted February 18, 2017 Share Posted February 18, 2017 Why not just buy baba stock then? I can't speak for Giofranchi, but if you take the view that BABA is trading at something of a discount given the growth prospects for its core retail business as well as Alipay, Cainiao, and their stakes in Didi, PayTM, etc then any movement of its stock price towards a fairer value will have an outsize impact on Softbank because of the far bigger effective discount that Softbank's BABA stock is trading at. This assumes an investor trusts management's ability to allocate capital intelligently, but Son tends to do that more often than not. Recently, there have been substantial share buybacks at a big discount and the supposedly terrible Sprint investment is in the black on a currency-adjusted basis while the turnaround continues to go well. Before the ARM purchase, Softbank liquidated about $8B worth of BABA stock. If they continue to liquidate BABA stock every few years, then all things being equal, it will have a far higher economic value for SFTBY shareholders than it would for an ordinary BABA shareholder who was liquidating their position. Link to comment Share on other sites More sharing options...
giofranchi Posted February 19, 2017 Share Posted February 19, 2017 Why not just buy baba stock then? Probably because I have no strongly held views in technology. I prefer to have exposure to BABA, ARM, and a myriad of other businesses, than to have exposure to BABA alone. In other words I prefer a basket approach. Is SoftBank a sort of basket in technology put together by Masa Son? If so, that's fine with me! While reading "Alibaba - The House That Jack Ma Built", I have found what Jack Ma has said about Masa Son to be very interesting. Please, find it in attachment. Cheers, Gio Link to comment Share on other sites More sharing options...
ccplz Posted February 19, 2017 Share Posted February 19, 2017 Guess it's time to start shorting Softbank then. Link to comment Share on other sites More sharing options...
giofranchi Posted February 19, 2017 Share Posted February 19, 2017 Guess it's time to start shorting Softbank then. I am not sure I understand... Why do you say so? Cheers, Gio Link to comment Share on other sites More sharing options...
plato1976 Posted February 19, 2017 Share Posted February 19, 2017 yes, maybe not outright short, but at least to be cautious at this point...... Guess it's time to start shorting Softbank then. Link to comment Share on other sites More sharing options...
giofranchi Posted February 19, 2017 Share Posted February 19, 2017 yes, maybe not outright short, but at least to be cautious at this point...... Guess it's time to start shorting Softbank then. Why now? It seems to me that SoftBank has never been on a sounder footing since the acquisition of Sprint. There are also new rumors a merger between T-Mobile and Sprint might come soon: http://www.cnbc.com/2017/02/17/softbank-eyes-sprint-t-mobile-deals.html And Sprint has finally started generating some positive FCF and is still improving. Meanwhile, SoftBank remains very cheap on a SOTP basis. Am I wrong? Cheers, Gio Link to comment Share on other sites More sharing options...
Picasso Posted February 19, 2017 Share Posted February 19, 2017 yes, maybe not outright short, but at least to be cautious at this point...... Guess it's time to start shorting Softbank then. Maybe lighten up on a long just in case. Link to comment Share on other sites More sharing options...
giofranchi Posted February 19, 2017 Share Posted February 19, 2017 yes, maybe not outright short, but at least to be cautious at this point...... Guess it's time to start shorting Softbank then. Maybe lighten up on a long just in case. Dennis, You see serious issues here at this point? If so, would you mind sharing them? Thank you! Gio Link to comment Share on other sites More sharing options...
Picasso Posted February 19, 2017 Share Posted February 19, 2017 Hey Gio, I actually sort of agree with you, if they can somehow merge S with TMUS then it's probably safe to assume that the investment is no longer a zero. Most SoftBank investors were marking that down to zero or shorting out S to get comfortable with the SOTP. But SOTP is probably not the right way to value SoftBank. It's a super levered equity stub that seems to always trade at a low multiple of earnings. I don't buy into the whole "our public holdings offset the debt so we're not levered." A lot of Masa's decisions are highly unusual and in many cases just bizarre. I also wonder what BABA is really worth. I get some super shady vibes out of management at that company... Sorry, I don't have a real view on this. Used to own shares, don't anymore. Seems like it can be a home run from here or a total disaster. Link to comment Share on other sites More sharing options...
ScottHall Posted February 19, 2017 Share Posted February 19, 2017 You guys just need to have the Gambler's Instinct. When I bought my SFTBY shares after I found out about the co., I didn't short out any Sprint to offset my exposure. My shares tanked something like 50% before coming back to where they are today, which is up 30% from my purchase and has beaten the market. I think all this smarty pants stuff about shorting out exposures to create stubs is unnecessary, confusing, and probably not that helpful. If you're investing in a controlled company like this one is, you'd better be comfortable with management's strategy because due to path dependence, future deals may end up helping shape the outcome of previous ones. I'm in with Masa and will ride this sucker to $0 if that's where it's going... I think he's way too interesting of a character not to participate in whatever the hell his mind comes up with. Link to comment Share on other sites More sharing options...
giofranchi Posted February 19, 2017 Share Posted February 19, 2017 Hey Gio, I actually sort of agree with you, if they can somehow merge S with TMUS then it's probably safe to assume that the investment is no longer a zero. Most SoftBank investors were marking that down to zero or shorting out S to get comfortable with the SOTP. But SOTP is probably not the right way to value SoftBank. It's a super levered equity stub that seems to always trade at a low multiple of earnings. I don't buy into the whole "our public holdings offset the debt so we're not levered." A lot of Masa's decisions are highly unusual and in many cases just bizarre. I also wonder what BABA is really worth. I get some super shady vibes out of management at that company... Sorry, I don't have a real view on this. Used to own shares, don't anymore. Seems like it can be a home run from here or a total disaster. Thank you Dennis! Your point of view is always very useful. Why do you believe a SOTP analysis is not the right way to value the company? For me it is a small position anyway: if it turns out right, very well then. Otherwise, I am not risking much. Cheers, Gio Link to comment Share on other sites More sharing options...
giofranchi Posted February 19, 2017 Share Posted February 19, 2017 You guys just need to have the Gambler's Instinct. When I bought my SFTBY shares after I found out about the co., I didn't short out any Sprint to offset my exposure. My shares tanked something like 50% before coming back to where they are today, which is up 30% from my purchase and has beaten the market. I think all this smarty pants stuff about shorting out exposures to create stubs is unnecessary, confusing, and probably not that helpful. If you're investing in a controlled company like this one is, you'd better be comfortable with management's strategy because due to path dependence, future deals may end up helping shape the outcome of previous ones. I'm in with Masa and will ride this sucker to $0 if that's where it's going... I think he's way too interesting of a character not to participate in whatever the hell his mind comes up with. Thank you for your perspective, Scott! Always very useful. Cheers, Gio Link to comment Share on other sites More sharing options...
Picasso Posted February 19, 2017 Share Posted February 19, 2017 I don't like SOTP here because Masa is borrowing at something like 2% to buy assets compounding 20-30%. You can say it trades for some 30% discount to a fully-taxed NAV but NAV could easily jump 20-30% next year and so what if it trades at that NAV? You can't just sell it because it might continue to compound some crazy NAV. So if it works out you'll always be thinking you have some fully valued stock even though it might be earning $20 billion of underlying earnings in several years. The underlying earnings are constantly being reinvested in all kinds of crazy situations (like S or BABA purchases or some $100 billion hedge fund) making it too hard to keep calculating a SOTP. Plus I think there is some chance that BABA blows up Why else would they sell any of their position? It always seemed so against them to part with any of it. The Arora situation was simply bizarre (I guess he spearheaded the effort to sell down that stake as well as Supercell?). I'd rather just figure out what the underlying earnings are behind all the business segments, throw some 10x multiple as "normal" and assume it will always be a 10x business because he'll be levered up his eyeballs until the end of time. Then it's just a matter of looking at how earnings will grow and that's a hard question to answer... I'd probably still own shares if I hadn't found something more to my liking. Link to comment Share on other sites More sharing options...
giofranchi Posted February 19, 2017 Share Posted February 19, 2017 I don't like SOTP here because Masa is borrowing at something like 2% to buy assets compounding 20-30%. You can say it trades for some 30% discount to a fully-taxed NAV but NAV could easily jump 20-30% next year and so what if it trades at that NAV? You can't just sell it because it might continue to compound some crazy NAV. So if it works out you'll always be thinking you have some fully valued stock even though it might be earning $20 billion of underlying earnings in several years. The underlying earnings are constantly being reinvested in all kinds of crazy situations (like S or BABA purchases or some $100 billion hedge fund) making it too hard to keep calculating a SOTP. Plus I think there is some chance that BABA blows up Why else would they sell any of their position? It always seemed so against them to part with any of it. The Arora situation was simply bizarre (I guess he spearheaded the effort to sell down that stake as well as Supercell?). I'd rather just figure out what the underlying earnings are behind all the business segments, throw some 10x multiple as "normal" and assume it will always be a 10x business because he'll be levered up his eyeballs until the end of time. Then it's just a matter of looking at how earnings will grow and that's a hard question to answer... I'd probably still own shares if I hadn't found something more to my liking. Thank you again! Cheers, Gio Link to comment Share on other sites More sharing options...
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