9984.T - SoftBank Group Corp.
| Previous Close | 4,599.00 |
| Open | 4,582.00 |
| Bid | 4,616.00 x 0 |
| Ask | 4,617.00 x 0 |
| Day's Range | 4,582.00 - 4,690.00 |
| 52 Week Range | 3,401.50 - 6,045.00 |
| Volume | 9,755,600 |
| Avg. Volume | 11,604,796 |
| Market Cap | 9.559T |
| Beta (3Y Monthly) | 1.83 |
| PE Ratio (TTM) | 4.58 |
| EPS (TTM) | N/A |
| Earnings Date | N/A |
| Forward Dividend & Yield | 44.00 (0.94%) |
| Ex-Dividend Date | 2019-09-27 |
| 1y Target Est | N/A |
- Bloomberg
SoftBank Founder’s Empire Is Vulnerable to WeWork Woes
(Bloomberg) -- Masayoshi Son, who built a $15.2 billion fortune investing in tech startups like Alibaba Group Holding Ltd., is betting on himself more than ever, even as his empire shows signs of vulnerability.The SoftBank Group Corp. founder has pledged 38% of his stake in the Japanese firm as collateral for personal loans from 19 banks, including Credit Suisse Group AG and Julius Baer Group Ltd., according to a June regulatory filing. That’s up from 36% at the start of the year and triple the level in June 2013.“It lets him monetize a large share of his wealth without foregoing influence over the firm,” said Michael Puleo, assistant professor of finance at Fairfield University’s Dolan School of Business in Connecticut. “But there’s an elevation of crash risk. If the share price falls low enough, he could get a margin call and that could be pretty costly.”The structure highlights the extent of Son’s exposure to SoftBank and its $100 billion Vision Fund. Shares in the Japanese conglomerate have been rocked recently by the postponement of WeWork’s initial public offering. The delay came after the office-rental unicorn was being marketed at a steep discount to the $47 billion figure that the Tokyo-based conglomerate invested at earlier this year. That’s spooked investors, who sent SoftBank’s shares down 5% at one point this week as the listing unraveled, knocking $770 million off Son’s net worth. The stock has still advanced roughly 27% this year.Son, 62, also has leveraged his stake in the Vision Fund, which invests in tech startups. That boosts his returns if things go well, with outsized losses if they don’t. Uber Technologies Inc.’s falling market capitalization and WeWork’s travails are set to dent the 62% return on the fund that SoftBank reported through March.“There is a danger in companies where the founder calls all the shots regardless of whether there are loans,” said Robert Pozen, a senior lecturer with the MIT Sloan School of Management in Boston. “And when founders borrow a lot against their shares, they might be more tempted to make riskier decisions,” he said, adding that borrowing against 5% of one’s stake is usually considered reasonable.Pay OutSoftBank’s compensation plan also involves a lot of debt. Son loaned himself around $3 billion to invest in the first Vision Fund, according to people with knowledge of the matter, who asked not to be identified because the information isn’t public. Using loans for a private investment compounds Son’s risk because he would be less able to bail himself out if things go south, Pozen said.The loan was swapped for equity in the fund and will generate profits when deals make money -- and losses when they don’t. Vision Fund employees, including high-profile bankers and investors, receive base salaries and bonuses, but only get payouts when profits are booked.It’s unclear how much of this compensation will be reported in SoftBank’s next annual report. Son’s pledged shares, which currently have a market value of $9 billion, are excluded from his net worth calculation by the Bloomberg Billionaires Index. SoftBank spokeswoman Hiroe Kotera declined to comment.SoftBank is planning to lend as much as $20 billion to its employees to buy stakes in a second venture capital fund, the people said. Son may account for over half of the employee investment pool, they said.Ellison, MuskPledged shares have become an increasingly common way for founders to unlock the value of a stake without selling shares. Larry Ellison has a history of pledging Oracle Corp. stock to fund a lavish lifestyle, which includes trophy properties, America’s Cup teams and the Indian Wells tennis tournament. About 27% of his Oracle shares -- worth more than $16 billion -- are currently pledged. Elon Musk has pledged about 40% of his stake in Tesla Inc., according to a May 2019 filing.Still, the move comes with risks. “If the price of our common stock were to decline substantially, Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock to satisfy his loan obligations if he could not do so through other means. Any such sales could cause the price of our common stock to decline further,” Tesla warns in a filing.The risk-loving Son, who saw $70 billion wiped from his fortune in the dot-com crash, is unlikely to be fazed. He told shareholders at the company’s June meeting that SoftBank’s investment portfolio could grow 33-fold to 200 trillion yen ($1.8 trillion) in 20 years.\--With assistance from Pei Yi Mak, Sonali Basak, Ben Stupples and Venus Feng.To contact the reporters on this story: Giles Turner in London at gturner35@bloomberg.net;Tom Metcalf in London at tmetcalf7@bloomberg.net;Pavel Alpeyev in Tokyo at palpeyev@bloomberg.netTo contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Giles Turner, Steven CrabillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
WeWork London Building Deals Falter Amid IPO Market Fallout
(Bloomberg) -- Deals for two major London buildings leased mostly to WeWork are on the ropes.Saudi Arabia-based Sidra Capital has pulled out of a 90 million-pound ($112 million) deal as the flexible-office giant’s planned initial public offering got an increasingly rocky reception from investors, according to people familiar with the matter, who asked not to be identified discussing private negotiations.Separately, talks have stalled on the sale of WeWork Waterloo, which the company describes as the largest co-working facility in the world, according to other people with knowledge of the negotiations. Singapore-based Bright Ruby Resources Pte Ltd. had agreed last month to buy it and an adjoining property leased to Royal Dutch Shell Plc for about 850 million pounds. It’s not clear what impact WeWork’s roller-coaster IPO has had on Bright Ruby’s appetite for the deal, the people said.We Co., which owns WeWork, pushed back its IPO this week to buy time to overcome concerns about its governance, slashed valuation and business prospects. The decision sent the company’s bonds plunging and added a sour note to a medley of high-profile, but frequently disappointing, IPOs this year. Shortly after the announcement, WeWork made a small round of job cuts in a New York City unit.Read more: WeWork’s Breakneck Growth Hits Resistance as Banks Get Cold FeetThe delay also comes at a critical time for major backer SoftBank Group Corp., which is trying to raise money for a successor to its Vision Fund. SoftBank’s biggest investors, including Saudi Arabia’s Public Investment Fund, are reconsidering how much to commit to the new vehicle as the Japanese conglomerate’s bet on WeWork sours.WeWork has lease obligations of $47 billion and continues to burn cash to fund its rapid expansion, putting pressure on the company to raise new capital. But the company’s model of signing long leases, then renting out short-term space to members, as well as its complex relationship with co-founder Adam Neumann, have polarized investors assessing the planned offering.Skate RampWeWork Waterloo, originally known as Two Southbank Place, is fully leased to WeWork and boasts a skate ramp, retro arcade games and a library in its cavernous lobby. Negotiations on a sale, which were first reported by React News in August, are ongoing and there’s no certainty about their outcome, one of the people said.Representatives of Almacantar SA, the developer selling the buildings in London’s Waterloo district, and WeWork declined to comment. A representative for Bright Ruby wasn’t immediately able to comment.Sidra Capital was in talks to buy 70 Wilson Street near London’s financial district from a venture led by Columbia Threadneedle Investments, the people said.Representatives of Sidra Capital, Columbia Threadneedle and WeWork declined to comment.(Adds background in fourth paragraph.)\--With assistance from Lucca de Paoli and Alfred Cang.To contact the reporter on this story: Jack Sidders in London at jsidders@bloomberg.netTo contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Patrick HenryFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times
SoftBank-backed Nemaska Lithium hits setback as bondholders walk away
A SoftBank-backed Canadian lithium project has hit another setback after bondholders with $350m in debt decided to withdraw their support following delays to its construction. Nemaska Lithium said the bondholders would be repaid after it announced in July its mine in Quebec would be delayed beyond June 2021, in accordance with the original debt agreement with the company. Nemaska is struggling to finance the developing of the Whabouchi lithium mine following a dramatic fall in the price of lithium, which is a vital ingredient in electric car batteries.
- Financial Times
SoftBank looks to Oyo after WeWork setback
The 675-room property is this week being rebranded under the banner of Oyo, the Indian budget outfit that has reshaped its home market and is now opening a hotel a day in the UK and US. Fuelled with funds from SoftBank, the Japanese technology group, Oyo is plotting to become the world’s biggest hotel chain. “It’s very hard to put a limit as to the kind of growth, return, the market share that these guys could achieve,” said Munish Varma, managing partner at SoftBank’s Vision Fund.
- Financial Times
SoftBank-sized chill sweeps through Asia’s tech universe
FT subscribers can click here to receive Tech Scroll Asia by email. For your diaries: together with the Asia Society’s Center on US-China Relations, we will be holding two events in the US, in New York on October 16 and San Francisco on October 17. Hi everyone — the WeWork shock is big for SoftBank and for Asian tech as a whole.
- Financial Times
WeWork’s prophet has lost his charisma
With his flowing locks and gnomic pronouncement that the “energy of we [is] greater than any one of us, but inside each of us”, Adam Neumann has the air of a prophet. its planned initial public offering, even at a heavily reduced valuation, is a severe setback for the company, as well as its backers SoftBank and SoftBank’s Vision Fund, and visionaries everywhere. Mr Neumann’s authority was tested and has failed.
- Bloomberg
Junk Bond Market Signals WeWork to Look Elsewhere for New Cash
(Bloomberg) -- WeWork has an ambition to copy Netflix in one regard: sell junk bonds -- lots of them -- to fund its expansive growth plans.Netflix Inc., and a small group of other unprofitable companies such as Uber Technologies Inc., have managed to become darlings of the high-yield market even though they’re burning through cash.But for now, bond investors are signaling to WeWork that coming back to the high-yield credit market would be costly. And that could present a major challenge to the office-sharing company’s expansion hopes now that its initial public offering is on hold until at least October.The market’s verdict was delivered Tuesday morning when WeWork’s bonds sunk the most on record. Yields shot up to 8.5%. That’s around a percentage point more than a comparable offering from even lower-rated Tesla Inc.The IPO delay has left investors guessing where WeWork might turn for much-needed cash, short of another injection from backer Softbank Group Corp. WeWork was seeking to raise more than $3 billion in the IPO, and has another $6 billion in credit financing lined up if the offering was successful.But in the face of widespread concern over its financial model, the company’s valuation has plummeted, to $15 billion or less. That will make any new debt taken on by WeWork all that more riskier, said Arnold Kakuda, a senior credit analyst at Bloomberg Intelligence.“If they continue to grow, they’re going to need more and more financing,” Kakuda said. “There’s risk if this market capitalization is so low and yet they have so much debt.”WeWork’s $669 million of junk-rated bonds due in 2025 dropped as much as 7.3 cents on the dollar to 95.5 cents Tuesday in New York, according to the Trace bond-price reporting system. They’ve since pared back some of those losses to trade around 97 cents on the dollar.Riskier CreditAt current levels, the market prices WeWork’s debt between the B and CCC ratings tiers. Both Fitch Ratings and S&P Global Ratings give the debt B range grades. Compared to Netflix, which is rated a tier higher, with the third-highest junk grade from ratings companies, it’s a riskier credit.The potential problem for WeWork is that companies with riskier credit ratings -- or those that trade in line with them -- can have trouble maintaining regular access to the credit markets. In times of turbulence, investors typically cut those companies off first. Less than 10% of new junk bonds this year have been sold by CCC rated companies. (Uber has found success selling bonds that carry a CCC+ grade from S&P.)Read more from Bloomberg Intelligence: WeWork: Potential Early Redemption For BondsVicki Bryan, chief executive officer of Bond Angle, a high-yield credit research company, said in a report Tuesday that she could still see WeWork issuing more junk bonds, given how hungry investors are for yield in a world with $13.8 trillion of debt with negative interest rates. But she’s skeptical that the debt would be a good buy.“Just because the company needs fresh cash, pronto, doesn’t mean it’s a good idea for investors to oblige,” Bryan wrote. “Upside potential is limited at best versus downside risk.”She recommended selling the bonds at their Monday level of about 102.8 cents on the dollar, saying the bonds could plunge 10 to 15 cents if the company falters further.If the IPO fails, WeWork’s best back-up plan to keep growing might be more cash from Softbank Group, Kakuda said. The Japanese telecom giant made its last investment in WeWork, renamed We Co., at a valuation of $47 billion and the company and its affiliates hold about 29% of WeWork stock.WeWork has said it could become profitable faster if it slows its expansion plans. But it’s clear the company badly needs cash. S&P Global Ratings has estimated that the company will add 725,000 new desks next year at a cost of about $4.5 billion -- and will likely need to raise cash to fund its 2020 goals.To contact the reporter on this story: Claire Boston in New York at cboston6@bloomberg.netTo contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Larry Reibstein, Dan WilchinsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- InvestorPlace
WeWork IPO Delayed: 13 Things for Investors to Know
WeWork IPO delayed news is spreading Tuesday as the company pushes back the date.Source: photobyphm / Shutterstock.com Here's what investors need to know about the WeWork IPO being delayed. * WeWork was planning to hold a road show event this week to build up interest in an IPO. * While WeWork doesn't give the exact reason for the delay, there are a few likely candidates. * Among these is the company's valuation coming in below it expectations. * The company may seek a valuation of $10 million to $12 million from investors. * It's private valuation was sitting at $47 billion. * It's possible that WeWork may use the time until its next IPO to try and drum up more interest from investors. * There was talk that opposition from WeWork investor Softbank (OTCMKTS:SFTBY) was part of the problem. * However, it doesn't appear that this is the case. * Instead, there was reportedly a deal in place that would have Softbank converting its warrants to match the WeWork IPO price. * Despite this, it does seem like there are some investors that want the company to hold off on the WeWork IPO. * While a hard date isn't set yet, the IPO could take place as early as mid-October. * Softbank may be among the investors pushing for the company to not go public until sometime next year. * The plan is for WeWork to trade on the New York Stock Exchange under the stock ticker "WE". * 7 Momentum Stocks to Buy On the Dip You can follow these links to learn more about the WeWork IPO being delayed.InvestorPlace - Stock Market News, Stock Advice & Trading Tips More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher As of this writing, William White did not hold a position in any of the aforementioned securities.The post WeWork IPO Delayed: 13 Things for Investors to Know appeared first on InvestorPlace.
- Bloomberg
SoftBank’s ARM Loses Technology Chief, Co-Founder Muller
(Bloomberg) -- Mike Muller, the co-founder and chief technology officer of ARM Holdings Plc, will retire at the end of the month, marking an end of an era for the U.K. chip designer.Muller, 60, had served as the Cambridge, England-based company’s CTO for nearly 20 years, according to its website. It wasn’t immediately clear who would replace him, a company spokesman said.ARM was the U.K.’s largest listed technology company, receiving royalties from companies such as Apple Inc. and Samsung Electronics Co., when Masayoshi Son’s SoftBank Group Corp. bought it for $32 billion in 2016. Change came fast after Son’s investment, with the company adding about 2,000 employees and making plans for a new 48-million pound ($60 million) building on the Cambridge campus. Muller had called the building, with a 180-meter (590-foot) long atrium and floating staircases, “quietly understated.”Following the takeover from SoftBank, what was once seen as a successful if sleepy U.K. tech company was soon told to transform itself into a fast-growing startup similar to SoftBank’s other tech investments. Son has said he wants to relist ARM in the next five years and Chief Executive Officer Simon Segars said ARM is investing heavily attempting to break into high-end computing and to become central to self-driving car technology.Last year, the company made its biggest acquisition in 14 years, spending $600 million for a data analytics startup in an attempt to build out its internet-of-things division.Muller was one of about 16 founders when ARM was created in 1990 of which a handful remain. A Cambridge University alum, he also acts as a non-executive director of Cambridge Innovation Capital, which funds companies that start in the school or the “Cambridge ecosystem.”(Updates with details about Son’s investment in the third paragraph.)To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly Schuetz, John J. Edwards IIIFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
WeWork Postpones Long-Awaited IPO, Sending Its Bonds Falling
(Bloomberg) -- WeWork pushed back its much-awaited initial public offering as the company seeks more time to allay investor doubts over its governance, slashed valuation and business prospects.The offering is likely to be postponed until at least October, people familiar with the matter said Monday. The office-rental unicorn had planned to begin making its pitch to investors in a roadshow as soon as this week.“The We Co. is looking forward to our upcoming IPO, which we expect to be completed by the end of the year,” the company said in a statement on Monday evening in New York. On Tuesday morning, co-founders Adam Neumann and Miguel McKelvey, as well as Chief Financial Officer Artie Minson, addressed employees in a roughly half-hour webcast. Minson said the company delayed the offering to make sure it was done “1,000% right,” and Neumann reiterated the plan to go public in 2019, according to a person who heard the remarks.The IPO was expected to be the next step in WeWork’s rapid growth and mark a victory for Japanese telecom giant SoftBank Group Corp.’s plan to pour billions into startups around the world. Instead, it turned into a dramatic struggle between the company’s chief executive officer, bankers and SoftBank over whether to plow ahead in spite of a plunging valuation or pull the deal.The delay will give advisers more time to drum up interest and may allow the company to show investors another quarter’s worth of results. Still, the value of WeWork’s bonds sunk the most on record Tuesday on concerns that the cash-burning company will miss out not only on the more than $3 billion it planned to raise in the offering, but also a $6 billion credit facility tied to a successful IPO. WeWork must carry out the offering by Dec. 31 to get the loan, Bloomberg previously reported.SoftBank had pressed WeWork to put off the stock offering amid doubts about the business, people familiar with the matter said previously. In January, SoftBank made its last investment in WeWork, renamed We Co., at a valuation of $47 billion. The company was more recently expected to be valued at only about $15 billion in a listing and perhaps even less, people familiar with the matter have said.The company’s $669 million of bonds due in 2025 dropped as much as 7.3 cents on the dollar to 95.5 cents Tuesday in New York, according to the Trace bond-price reporting system. That’s the biggest decline since the notes were issued in April 2018.The biggest investors in SoftBank’s $100 billion Vision Fund are now reconsidering how much to commit to its next investment vehicle after the oversized bet on WeWork soured. Saudi Arabia’s Public Investment Fund, which contributed $45 billion to the gargantuan fund, is now only planning to reinvest profits from that vehicle into its successor, according to people familiar with the talks.Abu Dhabi’s Mubadala Investment Co., which invested $15 billion in the Vision Fund, is considering paring its future commitment to below $10 billion, the people said, asking not to be identified disclosing internal deliberations.The delay also adds another sour note to a medley of high-profile but frequently disappointing IPOs this year. The offering was expected to have been the biggest after Uber Technologies Inc.’s $8.1 billion listing, and ahead of the $2.3 billion offering by Uber’s ride-hailing rival Lyft Inc. Both of those stocks are down more than 20%, and software company Slack Technologies Inc. has fallen more than 30% from where it closed its first day of trading in June.WeWork has become an extreme example of the excesses afforded to technology entrepreneurs in the era of unicorns -- startups valued at $1 billion or more. Neumann was able to raise billions of dollars at astronomical valuations and spend freely, while retaining effective control over operations through special classes of stock.In an effort to keep its IPO on track, WeWork last week took steps to limit Neumann’s control of the company after an IPO, as well as other measures to improve its corporate governance.(Updates with details of staff webcast in third paragraph.)\--With assistance from Scott Deveau, Ellen Huet, Sridhar Natarajan and Claire Boston.To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Liana Baker in New York at lbaker75@bloomberg.net;Michelle F. Davis in New York at mdavis194@bloomberg.netTo contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Michael J. Moore, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
Car leasing app Fair raises $500 million loan from Mizuho, Softbank
SoftBank has stakes in Uber Technologies Inc, General Motors Co and its Cruise self-driving car, China's Didi Chuxing, South-east Asia's biggest ride-hailing firm Grab, and India's Ola. Fair has partnered with Uber to rent out cars to users who want to drive for the ride-sharing company.
- Bloomberg
SoftBank Needs a Different IPO After WeWork Slip
(Bloomberg Opinion) -- SoftBank Group Corp. and its Vision Fund need another win. And they need it fast.With news that U.S. rental office company WeWork – formally known as The We Company – looks set to delay its IPO, we can see just how dependent SoftBank supremo Masayoshi Son’s empire was on this one exit to keep the Japanese company’s hit machine ticking along. SoftBank Vision Fund has been a major investor in some of this year’s most significant listings. Uber Technologies Inc. and Slack Technologies Inc. were among them. Both have fallen this quarter, dragging down the value of the Fund.There is a pattern to how the Vision Fund keeps returns climbing. Buy in at a later round of a startup’s funding, list the company a year or two later, and book the mark-to-market gains.Sounds simple, except for the one-two punch that follows: SoftBank, like most pre-IPO investors, is generally locked in and can’t cash out that profit for at least a year. Additionally, IPO shares have a tendency to perform badly in their first year. For SoftBank and the Vision Fund, that means quick gains turn to slow public-market losses that need to be booked every period, hurting returns in subsequent quarters.To paper over these losses, the Fund can book gains by bringing its next hot offering to market. That means that as long as there’s a healthy IPO each quarter, the pain from public-market declines can be squelched. So the model becomes: IPO gain, public-market losses, IPO gain. And around again.With WeWork, however, the merry-go-round risks turning into musical chairs. The game needs IPOs on the floor or the music stops. Had WeWork gone public before Sept. 30, and at a healthy premium to the various prices SoftBank paid through its funding rounds, then such paper profits likely would have covered over losses caused by the 26% decline in Uber’s shares so far this quarter and the 30% drop in those for Slack.As Bloomberg’ s Gillian Tan wrote earlier this month, SoftBank and its affiliates own around 29% of WeWork. Should the $47 billion valuation at which SoftBank most-recently bought in turn into the current whisper number of $15 billion, then SoftBank and the Fund could be set to lose as much as $9.28 billion right out of the gate.(4)That would result in an unusual IPO loss, drag down the Fund, and ruin the quarterly model. So it makes sense that SoftBank wants to delay WeWork’s IPO, at least until after Sept. 30. WeWork responded to reports of this delay by saying it expects to complete the IPO by the end of this year.Assuming that there’s no other basis for revaluation, such as a new equity round, the Vision Fund can still contend that WeWork is worth $47 billion when it closes its books at the end of this month.But that doesn’t solve the possibility of the Vision Fund posting a loss this quarter thanks to slides in Uber and Slack. One listed portfolio company, Ping An Good Doctor (aka Ping An Healthcare and Technology Co.), was up 39% in Hong Kong as of Tuesday morning, netting a gain of around $110 million to the Vision Fund. Others have fallen, including Guardant Health Inc. (-13%) and ZhongAn Online P&C Insurance Co. (-8.6%). I believe that this leaves SoftBank Vision Fund with little choice but to enact a two-pronged strategy. First, take a “big bath(3)” for the September quarter and get the bad news behind it. Second, hurry along the IPOs of the other unicorns in its stable.ByteDance, the hugely popular Chinese video content platform, is currently the world’s most valuable startup at $75 billion, according to CB Insights. That’s followed by Chinese ride-hailing provider Didi Chuxing at $56 billion. I don’t think either is ready to IPO in the next month or two, but there’s always a chance ByteDance may decide to list before a slowdown in the Chinese economy starts to show up in its growth metrics.There are also some smaller fruit about to ripen. South Korean e-commerce company Coupang and U.S. food delivery provider DoorDash Inc. could find favor among IPO investors. Southeast Asian transport and services startup Grab Holdings Inc. would also be very popular, but I sense they want to spend a little more time building the non-transport offerings before pitching an IPO. Then there is Son’s plan to relist British semiconductor designer ARM Holding Plc, which would likely be a success because of its central role in the global technology sector.Despite the troubles with WeWork, SoftBank still has a strong team of highly valued startups on its roster. But they’re not much good to the Vision Fund if they’re sitting on the bench.(1) The exact scale of any loss would depend on how SVF has valued preferred shares acquired in earlier rounds. This figure assumes the Fund raised valuations in subsequent funding rounds.(2) Big Bath refers to the concept of collating lots of bad news in one quarter so that a company can put it all in the past and move on. Often seen as manipulation, I'd argue this can actually be a healthy strategy because it allows investors and management to return their focus to building the company.To contact the author of this story: Tim Culpan at tculpan1@bloomberg.netTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Reuters
SoftBank leads financing round in Brazilian home goods retailer MadeiraMadeira
Japan's SoftBank Group Corp has led a $110 million financing round for Brazilian online home goods platform MadeiraMadeira, according to a statement on Tuesday. SoftBank's fresh capital for MadeiraMadeira comes from its $5 billion Latin America fund, launched in March, which has been directed to sectors ranging from banking and real estate to home goods and delivery services. Investment firm Light Street Capital is also participating in the funding round, alongside SoftBank and Flybridge Capital, which is already an investor in MadeiraMadeira.
- Financial Times
WeWork postpones IPO after chilly response from investors
WeWork shelved its initial public offering on Monday night after struggling to drum up investor interest in the multibillion-dollar listing, in an embarrassing setback for the New York-based property group. The company had planned to launch a roadshow marketing the IPO as early as Monday morning, and to price and list its shares next week. Mr Neumann, 40, had given his advisers at JPMorgan Chase and Goldman Sachs until the end of September to finalise the listing, which was expected to raise between $3bn and $4bn.
- Financial Times
SoftBank investors brace for Vision Fund writedowns
SoftBank’s $97bn Vision Fund has shaken Silicon Valley since its launch in 2017, helping push valuations of private technology companies to new heights and delaying their initial public offerings. Eighty companies have received funding — masterminded by SoftBank’s founder Masayoshi Son — including some of the world’s largest unicorns such as Uber, Slack and ByteDance. Validation was supposed to arrive with the IPO of WeWork, the shared workspace provider that is one of SoftBank’s biggest investments.
- Reuters
UPDATE 5-WeWork delays IPO after frosty investor response
WeWork owner The We Company has postponed its initial public offering (IPO), walking away from preparations to launch it this month after a lacklustre response from investors to its plans. The U.S. office-sharing startup was getting ready to launch an investor road show for its IPO this week before making the last-minute decision on Monday to stand down, people familiar with the matter said. The company has been under pressure to proceed with the stock market flotation to secure funding for its operations.
- Bloomberg
This Isn’t Facebook: WeWork’s Lesson in Going Public
(Bloomberg) -- The message to Adam Neumann was clear: You’re not Zuckerberg.Over the past month, as Neumann’s grandiose plans for We Co. started to fray, bankers began warning that he would have to loosen his iron grip on the company.The old era of Mark Zuckerburg was over, WeWork executives would soon learn. Back in 2012, Zuckerberg could take Facebook Inc. public and still retain extraordinary voting power. But that was then.And so it was that Neumann, the polarizing co-founder of WeWork, begrudgingly agreed this week to cede some of his powers. The question now: Will that be enough? Already, WeWork’s hoped-for valuation has plunged by more than half, or some $30 billion.By Friday morning, Neumann’s company had hastily filed an amended prospectus for an initial public offering -- one that will test not only WeWork and its guru-CEO but, in many ways, an entire generation of money-burning, grow-at-all-cost startups.In a matter of weeks, WeWork’s IPO has gone from one of the most hotly anticipated deals of the decade to perhaps one of the most dreaded. Despite growing skepticism over WeWork’s business prospects, Neumann has resisted corporate-governance changes that would be considered standard elsewhere.The chaos was apparent Thursday and Friday, as WeWork picked a stock exchange, emailed bankers and filed its new prospectus -- all in about 12 hours.Nasdaq ListingDefying skeptics -- among them, some of its own financial backers -- WeWork is plowing ahead with plans to go public on the Nasdaq stock market. Not even Nasdaq officials knew for certain that the company would chose the exchange until the last minute on Thursday, according to people familiar with the matter.Emails were flying into the night. The new prospectus hit just after 6 a.m. on Friday.Now, yet another deadline looms: September 27, the Friday before Rosh Hashanah, the Jewish New Year. Neumann is expected to observe the holiday and be out of communication for several days, people familiar with WeWork said. WeWork representatives did not respond to a request for comment.Neumann didn’t get where he is, atop one of the most talked-about startups of the decade, by sharing. But in a new prospectus WeWork disclosed that Neumann would wield less power via an unusual class of high-voting stock.Now, executives must persuade investors that their company -- which has raised $12 billion since its founding and never turned a nickel of profit -- is worth billions on the stock market. As of late Friday, it was unclear whether they would be able to start marketing the stock via a roadshow starting on Monday, as many had expected.$65 Billion Value?Unclear, too, is just what WeWork might fetch on the open market. Only months ago, some bankers whispered it might be worth as much as $65 billion. Now that figure has fallen to as little as $15 billion.Beyond a page or so of steps WeWork would take to tighten up its corporate governance practices, Friday’s amended prospectus was little changed from the initial one in August.The dedication, even the second time, is pure Neumann:TO THE ENERGY OF WE –GREATER THAN ANY ONE OF USBUT INSIDE EACH OF USAmong other things, the company will trim the voting advantage that gives Neumann sway over the board, and no member of his family will be allowed to sit on the board. WeWork will also announce a lead independent director by year’s end.The move leaves in place a rare three-class stock structure and Neumann still maintains a voting majority, so it’s unclear how much the changes will appease both investors and the banks in charge of managing WeWork’s IPO.Valuation QuestionsQuestions remain about how investors will value the fast-growing, money-losing office leasing business that’s backed by SoftBank Group Corp. Both of the company’s lead financial advisers --JPMorgan Chase & Co. and Goldman Sachs Group Inc. -- have previously voiced concerns about proceeding with an IPO at a valuation around $15 billion, people briefed on the discussions have said.Looking to save the IPO and limit its downside, SoftBank is in discussions to buy about $750 million worth of additional stock in the offering, the people said.The board will have the ability to remove the CEO, and the updated prospectus has taken out a clause that previously said Neumann’s wife Rebekah -- who’s listed as a founder and chief brand and impact officer of WeWork -- will have a role choosing any new chief. Some criticized the changes as not going far enough.“This is an example of posturing,” Jeffrey Cunningham, who teaches management at Arizona State University and has served on several corporate boards, said of WeWork’s changes. The company appears to be facing pressure “to go public at a time that is inappropriate and with a governance record that is questionable.”Still, the moves drove WeWork bonds to be the biggest price gainers in high-yield bond trading for part of Friday. A Fitch Ratings analyst said the changes addressed many of the issues that the ratings company raised in downgrading WeWork’s credit grade last month.“A key component of WeWork’s model is the ability to restrain growth in the event of a downturn and these governance changes increase the likelihood that an independent board will have the power to enforce such a decision,” Kevin McNeil, a director at Fitch, said in an emailed statement.(Corrects the size of the drop in WeWork’s hoped-for valuation in fourth paragraph)\--With assistance from Michelle F. Davis, Anders Melin, Tom Giles and Crystal Tse.To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.netTo contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, ;Michael J. Moore at mmoore55@bloomberg.net, David GillenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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SoftBank Backers Rethink Role in Next Vision Fund on WeWork
(Bloomberg) -- The biggest backers of SoftBank Group Corp.’s gargantuan Vision Fund are reconsidering how much to commit to its next investment vehicle as an oversized bet on flexible workspace provider WeWork sours.Saudi Arabia’s Public Investment Fund, which contributed $45 billion to the $100 billion Vision Fund, is now only planning to reinvest profits from that vehicle into its successor, according to people familiar with the talks. Abu Dhabi’s Mubadala Investment Co., which invested $15 billion, is considering paring its future commitment to below $10 billion, the people said, asking not to be identified in disclosing internal deliberations.A partial retreat of the two anchor investors would complicate fundraising for SoftBank Chief Executive Officer Masayoshi Son, who upended venture capital by making huge bets on promising yet unproven companies and spurring others to follow suit. Perhaps more than any other startup, WeWork has come to symbolize that brash style, and the success or failure of its IPO is likely to impact Son’s ability to raise cash for future deals.PIF executives are still considering options and no final decision has been made, one of the people said. A spokesman for the Saudi Arabian wealth fund declined to comment. Mubadala said discussions are continuing on whether or not any investment will take place. A representative for SoftBank’s Vision Fund didn’t immediately have a comment.“The suggestion we have made any decisions on the size or timing of a potential investment is simply unfounded,” said Brian Lott, a spokesman for Abu Dhabi’s sovereign fund. “Our discussions continue at an appropriate and deliberate pace, given the importance of this effort.”Sagging ValuationThe Wall Street Journal previously reported that Saudi Arabia’s sovereign wealth fund wasn’t planning to be a significant investor in the new fund but may still make a more modest commitment. A decision to only reinvest proceeds from the first fund would mark a significant shift. Saudi Arabia’s Crown Prince Mohammed bin Salman said last October that he planned to invest another $45 billion into any new fund.“We would not put, as PIF, another $45 billion if we didn’t see huge income in the first year with the first $45 billion,” he said in an interview with Bloomberg.WeWork is one of SoftBank’s flagship investments, along with Uber Technologies Inc., messaging software provider Slack Technologies Inc. and U.K. chipmaker ARM Holdings Plc. SoftBank, which with its affiliates, owns a 29% stake, and in January invested at a valuation of $47 billion, more than triple the $15 billion that’s currently being discussed in an IPO.Tensions have erupted within SoftBank over how it has handled its investment in WeWork. The Vision Fund, along with PIF and Mubadala, scuttled a $16 billion investment early this year Son had championed. SoftBank ended up making only a $2 billion investment from its parent entity, rather than the Vision Fund.SoftBank said in July that other investors had expressed interest in pledging a combined $108 billion for the second Vision Fund, though that was before WeWork forged ahead with plans for an IPO. The new fund is expected to collect money from Apple Inc., Microsoft Corp., Foxconn Technology Group and various Japanese financial institutions, with seven having signed memorandums of understanding to participate.(Adds that talks are ongoing in fourth paragraph.)\--With assistance from Matthew Martin.To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Giles Turner in London at gturner35@bloomberg.netTo contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Christian Baumgaertel, Sree Vidya BhaktavatsalamFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
