Masayoshi Son is back... for now. Will the financial good fortune last?

Ian Scales
By Ian Scales

Feb 16, 2021

  • The stock market watchers are getting highly excited by the symmetry
  • It’s exactly 21 years since Son pulled off a similar turnaround 
  • Has he done it again?

Just when you think he’s blown it, he’s back. Masayoshi Son, written off by many for flying too close to the sun with his big bets on new technologies and business models in 2020, seems to have triumphed... again. His principal vehicle, Softbank Group, has just executed a remarkable turnaround, surging on the Tokyo stock market to win a share price it last enjoyed exactly 21 years ago in February 2000. 

SoftBank Group’s shares closed 4% up at 10,420 yen, above the record 10,111 yen they reached in February 2000. 

No one single thing had come to Masayoshi Son’s aid. Rather, SoftBank benefited from a surging stock market which lifted the collective value of the SoftBank group of companies. Put another way, Softbank’s portfolio of shares have climbed by around 300 per cent from the low they experienced in March last year after the pandemic struck. The portfolio is now estimated to be worth $200 billion and the stock market good fortune rolls on. SoftBank backed South Korean ecommerce firm Coupang has just applied to list in the US and is aiming at a $50 billion valuation. 

Big bets, big misses

When you make big bets you can expect the occasional big misses, which is what happened to Son’s big bets last year: SoftBank, in May, suffered an operating loss of 1.35 trillion yen ($12.5 billion) after office-sharing provider WeWork and satellite startup OneWeb both turned in poor results. To shore things up Son sold 4.5 trillion Yen worth of assets to buy back 25 trillion Yen’s worth of stock. That and other financial juggling started pushing Softbank’s stocks to new heights.

Then there was the Vision Fund. In November Son’s Vision Fund also started making large amounts of money as the technology shares rallied and boosted the value of publicly traded outfits like Uber Technologies. That had the value of instilling confidence in Son’s technology picking ability and no doubt helped the Softbank portfolio to rise further.

And Son was still investing - another sign of confidence. He put $680 million into Doordash (a timely food delivery company) which Son now calculates is worth around $9 billion. 

Whether the stock market peaks are again followed by new dips (market watchers seem to think a correction is already past due) is probably a certainty. All hinges on how dippy those new dips turn out to be.

 

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