Has been on a year-long campaign to remake its capital structure and asset portfolio to make itself more attractive to investors, and the plan has worked extensively — stocks have fallen to 130% below stock in March .
But in the midst of its aggressive push to sell assets, pay debt and return stock, the company periodically does things that confuse Street Out, which consistently ranks among the company’s market value of 50. % Is a reason for the discount and its underlying assets.
There are not many details here. Neither the journal nor the FT has any details on the size of the bet, which was the focus of stock trading, or even if recent trades still apply. The Journal states that an investor appears to have purchased options tied to $ 50 billion of individual stock, but the value of the options invested will likely be much less.
SoftBank is not commenting. But a push into the options market would be in line with other recent signs that founder and CEO Masayoshi Son, known mostly as Masa, is interested in betting on equity markets. Here we know:
Announcing June-quarter earnings, SoftBank also announced the creation of a subsidiary with a capital investment of $ 555 million, with cash two-thirds and one-third from Massa. Announcing the unit, the company specifically stated that it would invest in highly liquid public listed shares through both direct investment and derivative transactions.
As Baron’s Report, Softbank reported a $ 611.5 million profit in the June quarter after investing $ 10 billion in large-cap tech companies from its recent asset sales. By the end of the June quarter, the position had grown to $ 3.4 billion.
In a subsequent Securities and Exchange Commission filing, the company disclosed $ 3.8 billion in take-stock holdings as of June 30, reflecting both the position the new fund’s holdings and the technical investment with proceeds from recent asset sales. Softbank discloses $ 1 billion stake
(AMZN) as well as $ 475 million worth
(GOOGL) and Adobe (ADBE) shares of approximately $ 250 million. Other big bets include
(NVDA), all between $ 180 million and $ 190 million, with nine other stockholdings around $ 100 million, including
Zoom video communication
As part of its June-quarter earnings announcement, the company also said that it is changing the way it reports financial results to reflect the fact that it is an investment company and not an operating company. Reporting is only reinforced by reports that have become a major force in the company options market.
Only last week, SoftBank announced plans to sell about a third of its position in the telecommunications company
(9434. Japan) for $ 13.5 billion. It topped the company’s nearly $ 41 billion asset sale program announced earlier this year, and was completed through the sale of a large slice of the company’s stake.
(TMUS), the previous sale of SoftBank Corp shares, and the sale of a small slice of the company’s huge stake
Alibaba group holding
The company has also admitted that it is purchasing UK chip design house Arm, which it bought in 2016 for $ 32 billion. The business may be worth $ 40 billion or more. Add it all up, and you have about $ 100 billion in cash, which allows Massa to dub into tech stocks, heat the options market, or almost anything else.
What makes this situation so bad is that after six months of aggressively trying to appease the program of asset sales to investors, to pay billions in debt and buy back $ 10 billion of stock, one And with $ 15 billion in stock, Massa took the risk of frittering away that harmony in equity or derivative markets would have to be huge.
SoftBank’s US Depository Receipts (SFTBY) was down 3.3% to $ 28.97 in recent trade.
Was down 0.8%.
Write Eric J. at [email protected] Savitz