TOKYO, Aug 9 (Reuters) - SoftBank Group Corp is
accelerating asset sales after its flagship Vision Fund unit
booked nearly $50 billion in losses in just six months, but
Chief Executive Masayoshi Son faces narrowing options and
slumping valuations, analysts said.
Son said on Monday that he is in discussions to sell asset
manager Fortress, without commenting on a valuation. SoftBank
also raised $2.4 billion selling shares in T-Mobile US
during the latest quarter, while unloading a variety of other
But as valuations fall, easy options for raising cash are
getting harder to come by.
With SoftBank having shifted focus from operating companies
to tech investing, and Son staking his reputation on generating
big returns that can be recycled into further tech bets, the
billionaire will be keen to avoid selling Vision Fund assets at
a loss, analysts said.
"Most of the portfolio is underwater, making the case to
sell harder to justify," Redex Research analyst Kirk Boodry
wrote in a note. He pointed to e-commerce firm Coupang
and food delivery firm DoorDash as potential
Vision Fund exited a swathe of assets in the April-June
quarter - including ridehailer Uber Technologies and
property platforms Opendoor Technologies and KE
Holdings, which operates China's Beike - for a
realised gain of $5.6 billion.
SoftBank sold the final tranche of Uber shares at a loss,
Boodry calculates, and generated a total return of just $1.5
billion on the stake. Son backed the firm with an eye on
autonomous driving, with SoftBank becoming the largest
shareholder, but Uber abandoned its efforts to develop a
"SBG (SoftBank Group) is willing to monetise any asset at a
reasonable price," Jefferies analyst Atul Goyal wrote in a note.
"It is a good sign for SBG shareholders, though it does not
bode well for ... investee companies".
Son has sold assets in past downturns to raise cash,
including the early days of the COVID-19 pandemic during which
he said startups had fallen into the "valley of the
SoftBank agreed to sell chip designer Arm to Nvidia
in 2020 but the deal later stumbled over regulatory hurdles. Son
still hopes to list Arm in the United States.
The Japanese conglomerate has also cashed in on its large
and liquid stake in e-commerce firm Alibaba to raise
Times have changed, however, with the downturn in
While SoftBank raised $17.3 billion in the last few months
on its Alibaba holdings through prepaid forward contracts, the
Chinese firm has lost more than two-thirds of its value from
highs in late 2020.
Son has also pledged to "play defence" and on Monday laid
out a further scaling back of investing activity and cost
cutting across the group.
Some analysts say private asset prices may have further to
fall, potentially raising the bar for efforts to generate
returns, and Son said SoftBank had been in a bubble in
"(The) private book is still far more inflated than public
listed assets are and hence the real downside could still be
material," Jefferies analyst Goyal wrote.
While reshaping its portfolio, SoftBank has also announced a
400 billion yen ($2.97 billion) buyback of its own shares, in
addition to an existing 1 trillion yen repurchase programme that
is 70% complete and due to expire in November.
"It's possible the structure of the company will be
reviewed, including through a management buyout, in the not too
distant future," SMBC Nikko Securities analyst Satoru Kikuchi
wrote in a note.
($1 = 134.8500 yen)
(Reporting by Sam Nussey; Editing by Miyoung Kim and Edmund