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    9434   JP3732000009

SOFTBANK CORP.

(9434)
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Funding Secured? A Private SoftBank Seems Unlikely -- Heard on the Street

09/14/2020 | 07:56am EDT

By Jacky Wong

Taking SoftBank private may sound nice to its flamboyant founder Masayoshi Son. But carrying it out won't be easy.

Mr. Son's erratic investment style has never fit well with the scrutiny he has received as the chairman of a publicly listed company. The latest case in point: SoftBank's shares fell 10% in three days last week after reports revealing the company's massive option bets on tech stocks. Making SoftBank a private company would remove such visible volatility, especially since Mr. Son has long complained that the market has undervalued the company. The rumors of a management buyout have come up from time to time over the past few years though an actual buyout has never materialized.

Such rumors have resurfaced again: SMBC Nikko Securities, for example, said delisting SoftBank via a management buyout is a possibility in a research note last week. The company's recent asset sales lend some credence to the theory. SoftBank just announced a $40 billion deal to sell its chip unit Arm Holdings to Nvidia and priced its $10 billion sale of a 22% stake in its domestic telecom unit. SoftBank's shares jumped 9% Monday.

A private SoftBank would let Mr. Son carry out his sometimes baffling investment ideas more freely, but making it happen would require an enormous sum. SoftBank has a market value of $113 billion--not including its treasury shares--after Monday's surge. Excluding Mr. Son's nearly 30% stake, the buyer would still need to put up around $100 billion, assuming a 25% takeover premium. Part of that could be reduced with Softbank's cash, but Mr. Son will still likely need help from banks or private-equity investors to pull this off.

Low interest rates may make financing cheaper--though making SoftBank even less disciplined in its investments could give lenders pause. Similarly, private-equity funds may salivate at Softbank's discount to its net assets, but that would require them to have bigger say over asset sales, which contradicts the very reason for the company to go private.

There is an easier way to boost Softbank's share price. The market loved its decision in March to sell or monetize 4.5 trillion yen, equivalent to $42.39 billion, worth of assets to buy back shares and redeem debt, before its option bets unnerved investors.

More generous payouts would be an simpler--and perhaps more realistic--way to buy goodwill from shareholders.

Write to Jacky Wong at JACKY.WONG@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
NVIDIA CORPORATION -1.78% 220.81 Delayed Quote.69.14%
SOFTBANK CORP. 3.49% 1584.5 End-of-day quote.22.54%
SOFTBANK GROUP CORP. 2.76% 6627 End-of-day quote.-17.76%
All news about SOFTBANK CORP.
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09/22Softbank to Take More Cautious Approach to China Investments
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09/16SOFTBANK : Boeing names new government operations chief
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09/14SOFTBANK : renews bet on Latin America with $3 billion fund
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09/13KDDI Selects SpaceX's Starlink to Provide Mobile Service in Rural Japan
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09/10SBI's Shinsei bid lifts Japan financial shares on consolidation hopes
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09/07Deutsche Telekom lifts T-Mobile U.S. stake in SoftBank swap deal
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More news
Analyst Recommendations on SOFTBANK CORP.
More recommendations
Financials
Sales 2022 5 599 B 50 591 M 50 591 M
Net income 2022 520 B 4 702 M 4 702 M
Net Debt 2022 4 124 B 37 258 M 37 258 M
P/E ratio 2022 14,5x
Yield 2022 5,43%
Capitalization 7 439 B 67 196 M 67 214 M
EV / Sales 2022 2,07x
EV / Sales 2023 1,99x
Nbr of Employees 37 821
Free-Float 58,1%
Chart SOFTBANK CORP.
Duration : Period :
SoftBank Corp. Technical Analysis Chart | 9434 | JP3732000009 | MarketScreener
Technical analysis trends SOFTBANK CORP.
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 19
Last Close Price 1 584,50 JPY
Average target price 1 656,79 JPY
Spread / Average Target 4,56%
EPS Revisions
Managers and Directors
Junichi Miyakawa President, CEO & Representative Director
Kazuhiko Fujihara Chief Financial Officer & Director
Ken Miyauchi Chairman
Takashi Tsutsui Chief Scientist & Managing Executive Officer
Keiichi Makizono Chief Information Officer
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