The trouble at SoftBank

After purchasing billions in US stocks this year, SoftBank was revealed as the ‘Nasdaq whale’. Following the firing of three key members, are things still going swimmingly?

It’s been an interesting few months for SoftBank, the Japanese conglomerate that owns stakes in Boston Dynamics and Uber alongside more established entities such as Amazon and Alphabet Inc. It started in September when SoftBank was revealed as the ‘Nasdaq Whale’ after hoovering up billions of dollars worth of big tech stocks – a development which the FT described as an “aggressive move into the options market [that] marks a new chapter for the investment powerhouse”.

Not that SoftBank doesn’t have cash to spare. In 2019, it reported a net income of 1.45 trillion yen – around $13.8 billion – and has total assets worth 31.18 trillion yen – around $296 billion. But not all bets seem to be paying off. The company posted a loss of $1.3 billion in Q2 after losing money on tech stocks, suggesting the ‘new chapter’ for the powerhouse investor wasn’t getting off to quite the start CEO Masayoshi Son had expected.

It’s perhaps this setback that has led to three key figures being cut from their positions this week. Rajeev Misra, head of SoftBank’s $100 billion Vision Fund has gone, as have COO Marcelo Claure, and CSO Katsunori Sago. For his part, Son said the changes were brought about to allow more external directors on the board. However, they are also likely to have come as a surprise to the figures involved; until as recently as this week Misra was said to be searching for a home in Abu Dhabi after SoftBank was reported to be considering a move for its Vision Fund from London to the United Arab Emirates.

According to the FT, the move may be due to SoftBank looking to take advantage of lower taxes in the UAE, as well as placing itself closer to Abu Dhabi’s Mubadala sovereign investment vehicle, which has sunk $15 billion into Vision Fund so far. Are these dynamic changes indicative of trouble at the top, or was clearing house part of Son’s masterplan all along?

masayoshi son
Masayoshi Son. Credit: Creative Commons/Nobihaya

Founded in 1981, SoftBank is relatively young in the game. Headquartered in Tokyo, the Japanese holding company is primarily known for its stakes in energy, financial companies and, fittingly given its location, tech firms.

The multinational conglomerate was founded by Masayoshi Son, 63, who also serves as CEO of SoftBank Mobile, and chairman of UK-based Arm Holdings. In 2013 Forbes placed Son 45th on its annual list of the most powerful people in the world and, as of 2018, estimates his net worth at $30 billion, making him the second richest person in Japan. Which isn’t surprising considering he’s been making million-dollar deals since his teens.

After moving to California aged 16, Son studied economics and computer science at Berkeley before developing an electronic translator which he sold for $1.7 million while still a student. He then invested the money in importing video games from Japan, netting a further $1.5 million profit.

Having graduated, Son set himself up as an early investor in internet firms, buying shares in Yahoo! and Alibaba in the mid to late Nineties. As of October 2018, SoftBank still owned 29.5% of Alibaba, a stake worth roughly $108.7 billion, although in June of this year Son stepped down the from the Alibaba board.

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