TOKYO – SoftBank Group has urged some of its high-profile portfolio companies to accelerate plans for stock market listings, telling them that they should take advantage of a strong investment desire for the thriving tech sector.
The Japanese tech investment group led by Chairman and CEO Masayoshi Son hopes that many of the businesses in the near $ 100 billion Vision Fund will crack a bullish sentiment for tech companies after pandemic coronavirus, sources familiar with the SoftBank strategy say.
“They are very prominent in their agenda and would like to list everyone,” said one officer at a company supported by the Vision Fund. The person said the argument was very logical: This is a one – time opportunity, and you should take it. “
Some of the key pledges of the Vision Fund, including ByteDance in China and Didi Chuxing, Southeast Asia Grab and South Korean Coupang, remain private. Making them public at a higher valuation than when the fund made the investment will allow SoftBank book paper benefits that can be turned off by selling shares.
SoftBank’s investment performance has gone on a roller-coaster ride since the announcement of Son Vision Fund in 2016. Building a history of profitable ventures would boost Japanese group’s bid as a way to gain access to tech companies that will more valuable down the road.
But SoftBank’s aggressive move of assets in recent months also indicates that Mac is preparing for a potential market downturn.
Strong desire for newly listed tech companies has raised hopes that SoftBank – which is showing earnings in the third quarter on Monday – may make a nice profit from its investment portfolio.
SoftBank Group’s share price hit a 21-year high on Friday after Auto1 Group, a German online car dealer backed by the Vision Fund, rose in its first stock trading day the day before.
The Vision Fund invested in Auto1 about three years ago at a value of 2.9 billion euros ($ 3.48 billion at current levels). The company ended its first day of trading with a market capitalization of 10.4 billion euros.
Shares of Kuaishou, a Chinese video streaming app, were also included in the company’s Hong Kong debate on Friday, raising expectations for a rise in the valuation of a larger competitive ByteDance.
SoftBank began building a war fund in March last year. Alibaba Group Holding, T-Mobile and telecom unit SoftBank Corp. have arrangements to sell their pledges. has generated more than $ 50 billion in cash.
The Vision Fund also sold shares worth $ 2 billion in Uber Technologies, as well as shares in messaging software provider Slack Technologies and biotech company 10X Genomics. In September, SoftBank announced plans to sell UK chip designer Army to Nvidia in a $ 40 billion deal, pending regulatory approval.
The money raised from these contracts is well above SoftBank ‘s original target of $ 41 billion, and some viewers believe the company is raising money to protect itself from recession.
His son previously expressed remorse when SoftBank investments fell in value after the dot-com explosion in 2000, that he did not have enough money to buy into tech giants like Amazon in the future.
“We are seeing false valuations right now, not because SoftBank has done a good job, but just because the market is hungry for all the IPO money,” said one analyst . “The biggest question is how long it can last, and whether SoftBank is able to leave in some places.”
A spokesman for the Vision Fund denied that SoftBank was urging companies to go public.
Rajeev Misra, Head of the Vision Fund, recently said the fund was about “long-term patient capital” but reinforces the potential for better return on investments.
“From our perspective, or the view of any investors, the increase in public market valuations is certainly giving way to a better revolution,” Misra said in a conference hosted by Goldman Sachs. “[From] Entrepreneurs’ view is that it gives them an alternative to raising capital at a much cheaper cost. “
SoftBank is not alone in the race to take companies publicly. More than 200 special purpose construction businesses – shell companies listed on the stock market with the aim of merging with private business – were established in 2020.