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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  SoftBank Group Corp.    9984   JP3436100006

SOFTBANK GROUP CORP.

(9984)
  Report
End-of-day quote. End-of-day quote Tokyo Stock Exchange - 11/30
7272 JPY   +0.30%
09:27aALERT : New purchases in the Investor Asia portfolio
11/30DoorDash aims to double valuation in much-awaited IPO
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11/30DoorDash aims to double valuation in much-awaited IPO
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After WeWork, WeHedge? Softbank's New Gambit Should Raise Eyebrows -- Heard on the Street

08/11/2020 | 07:22am EST

By Jacky Wong

Should you pay $50 to buy a box containing $100? There's a catch: the value of money in the box fluctuates and you can't take it out.

Investors have been answering yes to a similar question on SoftBank's stock, which trades at a big discount to its net assets, this year. But they may have second thoughts after the company's latest plan to set up an in-house investment arm.

According to the company's calculations, SoftBank's shares are trading at around a 50% discount to its net assets, including stakes in Chinese e-commerce giant Alibaba, wireless carrier T-Mobile and British chip designer Arm Holdings. That discount has already narrowed this year as SoftBank's stock has risen 34% to levels last seen during the dot-com bubble.

SoftBank's decision to sell or monetize Yen4.5 trillion ($42 billion) worth of assets to buy back shares and redeem debt has been the main driver. On Tuesday, the company said the asset monetization is mostly done, which includes selling two-thirds of its T-Mobile holdings. It unveiled Yen2.5 trillion worth of buybacks this year, of which Yen1 trillion has already been completed. It has also repurchased bonds and paid down debt.

The rally in technology stocks has also led to a turnaround in SoftBank's $100 billion Vision Fund. The fund reported an investment gain of Yen297 billion for the quarter ended in June, after posting an investment loss last fiscal year, in part due to the WeWork debacle.

Buybacks and rising asset values are good news, but SoftBank's decision to set up something akin to an in-house hedge fund will raise investor eyebrows again. The company said it would set up an investment management subsidiary to manage $555 million worth of excess cash. Investments would include publicly traded stocks like as Amazon.com and Facebook, as well as derivatives like call options on Alibaba. What makes matters worse is that Masayoshi Son, SoftBank's chairman, will own a third of the subsidiary, leading to a potential conflict of interest. That may not be a big amount at the moment, but it is a red flag for the company's corporate governance.

As with the example of the $100 box, investors will be more willing to pay up if they know where the money will go and how the returns will be distributed. SoftBank's latest investment project will work against that.

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

 

Stocks mentioned in the article
ChangeLast1st jan.
ALIBABA GROUP HOLDING LIMITED 0.25% 264.01 Delayed Quote.24.17%
FACEBOOK INC 3.46% 286.55 Delayed Quote.34.94%
SOFTBANK CORP. -0.19% 1284.5 End-of-day quote.-11.99%
SOFTBANK GROUP CORP. 0.30% 7272 End-of-day quote.52.90%
T-MOBILE US 0.59% 133.73 Delayed Quote.69.52%
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Financials
Sales 2021 6 015 B 57 674 M 57 674 M
Net income 2021 1 626 B 15 593 M 15 593 M
Net Debt 2021 9 813 B 94 096 M 94 096 M
P/E ratio 2021 7,53x
Yield 2021 0,58%
Capitalization 13 573 B 130 B 130 B
EV / Sales 2021 3,89x
EV / Sales 2022 3,82x
Nbr of Employees 80 909
Free-Float 66,2%
Chart SOFTBANK GROUP CORP.
Duration : Period :
SoftBank Group Corp. Technical Analysis Chart | 9984 | JP3436100006 | MarketScreener
Technical analysis trends SOFTBANK GROUP CORP.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 14
Average target price 8 283,46 JPY
Last Close Price 7 300,00 JPY
Spread / Highest target 50,7%
Spread / Average Target 13,5%
Spread / Lowest Target -12,5%
EPS Revisions
Managers
NameTitle
Masayoshi Son Chairman & Chief Executive Officer
Raul Marcelo Claure Chief Operating Officer & Vice President
Yoshimitsu Goto Chief Financial Officer & Senior Managing Director
Norikazu Oba Manager-Finance & Planning
Ken Miyauchi Director
Sector and Competitors
1st jan.Capitalization (M$)
SOFTBANK GROUP CORP.52.90%129 578
AT&T INC.-26.43%204 845
T-MOBILE US69.52%165 003
CHINA MOBILE LIMITED-29.16%122 549
NTT DOCOMO, INC.27.49%119 833
KDDI CORPORATION-8.32%65 740