Boom

SoftBank's profit hits a national record, thanks to IPO-Palooza (but it's not cashing in)

Thursday, May 13, 2021 by Robinhood Snacks |

Started from the valley, now we here... SoftBank is the Japanese tech and telecom investment giant behind companies like Uber and Alibaba. A year ago, SoftBank posted a record-shattering $18B loss for its techy Vision Fund, as the value of its Uber and WeWork stakes plunged. SB's precious unicorns were (literally) falling into the "Valley of Coronavirus" (see: slide 50). Now...

  • Softbank posted a record $46B profit for its 2020 fiscal year, the highest ever for a Japanese company.
  • That's double the previous record set by Toyota — and $5B more than Google's 2020 profit. Whoa.

“Producer of Golden Eggs”... how SoftBank describes itself in its iconic decks. During IPO-Palooza, a few of SoftBank's biggest fund unicorns made splashy public debuts. As their valuations soared, so did SoftBank's investment gains (at least, on paper). As of March, its $100B Vision Fund had racked up $57B in gains — 84% of which were unrealized (SoftBank didn't sell its shares).

  • Coupang (aka: the Amazon of South Korea) had the biggest US IPO of the year in March. SoftBank gained $24B from its 40% stake in the ecomm giant, which just reported strong quarterly sales.
  • DoorDash, now SoftBank's third-largest Vision Fund winner, had a monster December debut. It started trading at nearly double its IPO price (but has fallen since).
THE TAKEAWAY

SoftBank is going long... on tech (see: 300-year plan). Instead of selling shares, SoftBank is holding... and adding. Despite recent shakiness in the market, SoftBank is doubling down on tech investments — and shifting away from telecom. It tripled the amount of capital it has pledged to its second techy Vision Fund (which includes Cameo and Didi Grocery). Meanwhile, SoftBank has sold billions worth of T-Mobile and Sprint shares.