muscleman Posted February 4, 2015 Share Posted February 4, 2015 Does anyone know if Softbank is classified as a PFIC for US investors? I am surprised that no one seems to know? Link to comment Share on other sites More sharing options...
Picasso Posted February 4, 2015 Share Posted February 4, 2015 Why would it be a PFIC? This isn't a closed-end private equity fund that trades over a foreign market. Link to comment Share on other sites More sharing options...
muscleman Posted February 4, 2015 Share Posted February 4, 2015 Why would it be a PFIC? This isn't a closed-end private equity fund that trades over a foreign market. It is better to be safe than sorry. I know there are NYSE stocks that began to be classified as PFIC after a certain year, because the US company acquired a foreign company. In terms of Softbank, it holds equity interests in a lot of internet companies. It also has its own mobile operations in Japan. So how does this count? If its BABA stake appreciates, does that generate gross income? If it sells the BABA stakes, does that generate gross income? If yes, does that need to be applied to the following tests? It takes controlling stakes at most of its investments, or at least 20% equity stake. Does this account for "passive income", or should this be treated as its own operations? http://en.wikipedia.org/wiki/Passive_foreign_investment_company The income test is met if 75% or more of the foreign corporation's gross income is passive income, defined as foreign personal holding company income with modifications. The asset test is met if 50% or more of the foreign corporation's average assets (as defined in the IR Code) produce, or could produce passive income, or are assets (such as cash and bare land) that produce no income. The test is applied based on the foreign corporation's adjusted basis, for U.S. tax purposes, of the assets, or at the election of the particular shareholder, fair market values of the assets. Link to comment Share on other sites More sharing options...
Picasso Posted February 4, 2015 Share Posted February 4, 2015 Sorry if I sound annoyed but this is a pretty easy thing to look up which might explain why no one answered. Over 90% of Softbank's income is generated from the mobile/wireline business. They hold minority interests in a lot of other businesses but you wont see that in the EPS, for the most part. Link to comment Share on other sites More sharing options...
muscleman Posted February 5, 2015 Share Posted February 5, 2015 Sorry if I sound annoyed but this is a pretty easy thing to look up which might explain why no one answered. Over 90% of Softbank's income is generated from the mobile/wireline business. They hold minority interests in a lot of other businesses but you wont see that in the EPS, for the most part. I know that for GAAP accounting if the ownership is >20%, the minority net income will be included. If it is more than 80%, the whole balance sheet will be consolidated, except the net income will be deducted by the minority income. BABA's 32% owned by Softbank, so will its income be included? I don't see that in the financial statements. I wonder if Japanese accounting is similar to GAAP? Link to comment Share on other sites More sharing options...
innerscorecard Posted February 12, 2015 Share Posted February 12, 2015 http://cdn.softbank.jp/en/corp/set/data/irinfo/presentations/results/pdf/2014/softbank_presentation_2014_003.pdf Link to comment Share on other sites More sharing options...
usdtor05 Posted February 12, 2015 Share Posted February 12, 2015 not gonna lie I miss the golden goose...interesting to see them drop the Yahoo Japan discussion as compared to previously. makes more sense the way he is doing it now though. Link to comment Share on other sites More sharing options...
muscleman Posted March 8, 2015 Share Posted March 8, 2015 Does anyone know the ADR fees for SFTBY? SFTBY is trading at a discount to the 9984 symbol. :) Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 25, 2015 Share Posted March 25, 2015 SoftBank to Investors: ‘Forget About the Dividend’ http://blogs.wsj.com/moneybeat/2015/03/24/softbank-to-investors-forget-about-the-dividend/?mod=WSJBlog&mod=overheard Link to comment Share on other sites More sharing options...
fareastwarriors Posted April 23, 2015 Share Posted April 23, 2015 Silicon Valley Veteran Steers SoftBank’s Deals Former Google executive broadens scope of Japanese tech firm’s investments http://www.wsj.com/articles/silicon-valley-veteran-steers-softbanks-deals-1429824909 Link to comment Share on other sites More sharing options...
no_free_lunch Posted May 15, 2015 Share Posted May 15, 2015 Found an interesting article on Sprint at seeking alpha. The author suggests that their spectrum alone could be worth in the neighborhood of $100B which would imply significant upside for the stock. No idea if the number is realistic. The latest FCC AWS-3 auction, which provides companies the opportunity to bid for spectrum leases was the largest in history, raising $41.3 BB. Based on the valuation placed on spectrum in this most recent auction, Sprint's 2.5 GHz holdings may now be worth between $86 BB and $115 BB, far more than the $14 BB paid and $11.8 BB recorded. In addition to the 150 MHz of valuable 2.5 GHz spectrum holdings, there also is substantial value in Sprint's SRM and PCS licenses. Looking back at the latest spectrum swap between Verizon and T-Mobile, which occurred in 2014, Sprint's SRM and PCS holdings could be worth $6.9 BB and $14.8 BB, respectively. Adding these pieces to the value of the 2.5 GHz holdings, Sprint's total licenses could be valued in excess of $100 BB. http://seekingalpha.com/article/3183056-sprint-is-worth-more-than-you-think Link to comment Share on other sites More sharing options...
muscleman Posted May 15, 2015 Share Posted May 15, 2015 Thank you! I looked at S's first quarter and found this part confusing: http://www.sec.gov/Archives/edgar/data/101830/000010183015000009/sprint4qfy14earningsrelease.htm Postpaid net additions of 211,000 compared to net losses of 231,000 in the prior year quarter Postpaid phone losses of 201,000 improved sequentially for the fourth consecutive quarter and improved by nearly 500,000 year-over-year So what does this mean by "net additions of 211,000" and "losses of 201,000"? ::) Link to comment Share on other sites More sharing options...
constructive Posted May 15, 2015 Share Posted May 15, 2015 Postpaid net additions of 211,000 compared to net losses of 231,000 in the prior year quarter Postpaid phone losses of 201,000 improved sequentially for the fourth consecutive quarter and improved by nearly 500,000 year-over-year So what does this mean by "net additions of 211,000" and "losses of 201,000"? The next bullet makes it clear. They are signing up tablets faster than they are losing phones. Link to comment Share on other sites More sharing options...
Phaceliacapital Posted July 6, 2015 Share Posted July 6, 2015 Looked at this: Assumptions: 15% discount on publicly traded stocks for control/liquidity. Mcap: 69.280 Net Debt: 42 EV: 111.28 Key Assets quoted (includes haircut): Alibaba: 55.09 Sprint: 12.194 Yahoo Jap: 8.719 Gungho: 8.2 Key Assets - Private: Mobile at EBITDA 1.149 bn JPY times 5x EV/EBITDA = 46.8 Fixed at EBITDA 160 mn JPY times 5x EV/EBITDA = 6.528 Total= 137.577 Holding discount: 10% Total Value = 123.819 bn USD EV = 111.280 bn USD Implied negative value 12.539 bn (kind of cancels out Sprint stake). Do you guys see any errors? EDIT: Maybe easier if I add a spreadsheet screenshot: Link to comment Share on other sites More sharing options...
plato1976 Posted July 6, 2015 Share Posted July 6, 2015 I think a big chunk of the debt is under sprint instead of the parent company Looked at this: Assumptions: 15% discount on publicly traded stocks for control/liquidity. Mcap: 69.280 Net Debt: 42 EV: 111.28 Key Assets quoted (includes haircut): Alibaba: 55.09 Sprint: 12.194 Yahoo Jap: 8.719 Gungho: 8.2 Key Assets - Private: Mobile at EBITDA 1.149 bn JPY times 5x EV/EBITDA = 46.8 Fixed at EBITDA 160 mn JPY times 5x EV/EBITDA = 6.528 Total= 137.577 Holding discount: 10% Total Value = 123.819 bn USD EV = 111.280 bn USD Implied negative value 12.539 bn (kind of cancels out Sprint stake). Do you guys see any errors? EDIT: Maybe easier if I add a spreadsheet screenshot: Link to comment Share on other sites More sharing options...
Phaceliacapital Posted July 6, 2015 Share Posted July 6, 2015 The 42 excludes Sprint's debt. Link to comment Share on other sites More sharing options...
Phaceliacapital Posted July 22, 2015 Share Posted July 22, 2015 https://investingsidekick.com/softbank-corp-tks9984/ Link to comment Share on other sites More sharing options...
supertutti Posted August 19, 2015 Share Posted August 19, 2015 http://www.bloomberg.com/news/articles/2015-08-19/softbank-s-arora-to-buy-483-million-of-stock-as-personal-bet- Link to comment Share on other sites More sharing options...
fareastwarriors Posted August 19, 2015 Share Posted August 19, 2015 http://www.bloomberg.com/news/articles/2015-08-19/softbank-s-arora-to-buy-483-million-of-stock-as-personal-bet- wow. Link to comment Share on other sites More sharing options...
no_free_lunch Posted August 23, 2015 Share Posted August 23, 2015 It doesn't sound like Softbank will be putting much more into Sprint. I am in favor of that. “I was thinking to myself: ‘I made one of the biggest mistakes in my life,’ which was the misjudgment of the U.S. regulatory environment,” he says in the interview. Once the T-Mobile deal was dead, Mr. Son decided to “move on to the rest of the world and other businesses,” he says. .. "I’m a busy guy,” he adds. “Why should I even concentrate on the U.S. market when the situation does not look good?” .. Those are ominous signs for Sprint. In addition, Mr. Arora has privately expressed his frustration with SoftBank’s ownership of Sprint and has recommended trying to sell it, say people familiar with the matter. .. Mr. Son declines to comment on the meetings but concedes in the interview that Sprint doesn’t look attractive to potential buyers right now. “If nobody wants to buy it and we still have the customers, we still have employees, so I have to take care,” he says. Link to comment Share on other sites More sharing options...
no_free_lunch Posted August 26, 2015 Share Posted August 26, 2015 Sold out of SFTBY at about a 10% loss, however money got put into other positions that are down similar or greater amounts. BABA is such a large part of the story that it is scary to hold this with what is going on in China and even with the existing decline in BABA, the sftby price makes a lot less sense. I am also not bullish on Sprint so there is not enough left to justify holding it. Link to comment Share on other sites More sharing options...
frank Posted August 27, 2015 Share Posted August 27, 2015 Sold out of SFTBY at about a 10% loss, however money got put into other positions that are down similar or greater amounts. BABA is such a large part of the story that it is scary to hold this with what is going on in China and even with the existing decline in BABA, the sftby price makes a lot less sense. I am also not bullish on Sprint so there is not enough left to justify holding it. BABA's Taobao and Tmall business will be much larger five years from now regardless of whether China goes into a recession or not as the migration of common folk's everyday purchasing from offline to online is still on-going and well and for many small businesses Taobao is still be the only viable destination to sell to masses across the country. The thing I would really need to make sure is just what price I pay for the stock and what goes into my valuation equation as I think exchange rate and discretionary income growth rate are now much harder to predict than a year ago. Also, I think competition is building in the B2C business and it's totally possible that Tmall will lose share in the long run to JD and the likes. Link to comment Share on other sites More sharing options...
ScottHall Posted August 27, 2015 Share Posted August 27, 2015 I bought this one off of like two hours of research, but the way I see it, a lot of the value isn't necessarily in the big holdings today. Those provide a floor, so to speak, but the part I'm interested in is future capital allocation. I basically view Softbank as a (historically very successful) VC firm, and I'm happy to partner up for the long haul. Maybe this will prove to be a mistake, but I like the odds. Link to comment Share on other sites More sharing options...
innerscorecard Posted August 27, 2015 Share Posted August 27, 2015 Sold out of SFTBY at about a 10% loss, however money got put into other positions that are down similar or greater amounts. BABA is such a large part of the story that it is scary to hold this with what is going on in China and even with the existing decline in BABA, the sftby price makes a lot less sense. I am also not bullish on Sprint so there is not enough left to justify holding it. BABA's Taobao and Tmall business will be much larger five years from now regardless of whether China goes into a recession or not as the migration of common folk's everyday purchasing from offline to online is still on-going and well and for many small businesses Taobao is still be the only viable destination to sell to masses across the country. The thing I would really need to make sure is just what price I pay for the stock and what goes into my valuation equation as I think exchange rate and discretionary income growth rate are now much harder to predict than a year ago. Also, I think competition is building in the B2C business and it's totally possible that Tmall will lose share in the long run to JD and the likes. The worst case scenario to me is that Taobao becomes marginalized like eBay by someone like JD.com, so that people only shop for niche goods on Taobao or even Tmall. Now I don't think that will happen, based on what I know about Chinese consumer preferences. Link to comment Share on other sites More sharing options...
innerscorecard Posted August 27, 2015 Share Posted August 27, 2015 I bought this one off of like two hours of research, but the way I see it, a lot of the value isn't necessarily in the big holdings today. Those provide a floor, so to speak, but the part I'm interested in is future capital allocation. I basically view Softbank as a (historically very successful) VC firm, and I'm happy to partner up for the long haul. Maybe this will prove to be a mistake, but I like the odds. They kind of stopped doing that: http://www.livemint.com/Companies/rCVHvx2GglnyKdVDhcpkPI/SoftBank-to-shut-down-venture-capital-arm-report.html Link to comment Share on other sites More sharing options...
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