It is said that when you are down, the only way to go is up. Conversely, when you are at the top of the food chain, the only other way to go is down. It would, therefore, be the smart move to control your manner and terms of your descent by way of adequate foreplanning.
That seems to be the technique being employed by Japanese Tech Giant, SoftBank. The technology behemoth owns and operates SoftBank Mobile, one of Japan’s largest telecoms companies by market share (25 percent). SoftBank Mobile is by far one of the most profitable wholly owned subsidiaries of the SoftBank Group, with annual sales of roughly three trillion Japanese yen (approximately $27.1 billion). The telecommunications market in Japan, though profitable, is already saturated with high telecoms penetration and an ageing population.
SoftBank has responded to this trend by diversifying their investments into growth stage internet technology startups. In 2008, Softbank began investing in startup firms with its most successful investment to date. That investment was a $20 million stake of a growing internet venture Alibaba. When Alibaba went public in 2014, that investment was valued at $60 billion. In 2016, Softbank reduced its holding in Alibaba through direct sales from 32.2 percent to 28 percent for $7.9 billion. Some of its other investments include Korean e-commerce Website Coupang, Drama Fever, Didi Chuxing, and Supercell.
Japanese Tech Giant Softbank is currently considering an $18 billion Initial Public Offering of its mobile businesses to be listed on the London and Tokyo stock exchanges. The news was announced in the Japanese business daily, The Nikkei. The funds are intended to be used to ease the weight of a USD 12.8 billion debt financing on the company’s balance sheet to enable the conglomerate to expand investments in international technology businesses. If the sale is successfully concluded, Softbank would still retain 70 percent of her holding in SoftBank Mobile. Traditionally large firms listing on the Japanese stock exchange need to offer for sale at least 35 percent of her shares, but the regulation is relaxed for firms who are also listing in other international exchanges.
Analysts speculate that the move is not unrelated to the operations of the billion dollar venture fund led by SoftBank - Vision Fund. The Saudi-backed Vision Fund seeks to fund the future of technology businesses. The fund specializes mostly in high potential growth startups in the artificial intelligence, robotics and connected devices.
Last month, a Softbank-led consortium reached an agreement to buy 17 percent of Uber for $9 billion. The deal is set to be complete by the end of January.
The Japanese technology giant has been on an aggressive move to consolidate its position as a global technology player by investing in internet startups. The successful outings with Alibaba, Uber, and Chinese ride-hailing service Didi Chuxing have spurred the conglomerate to continue its exposure to explorative investments in growth stage internet startups.
SoftBank is a publicly-traded Japanese multi-national established in September 1981. It has its global corporate headquarters in Tokyo Japan. The SoftBank Group has operations in broadband; fixed line telecoms; internet; technology services; semi-conductor design; finance; media and marketing; and e-commerce. Some of its subsidiaries at this time include SoftBank Mobile; Sprint Corporation; Brightstar Corporation; Yahoo! Japan; Alibaba; Softbank C&S; Fortress Investment Group; ARM Holdings; and Fukuoka SoftBank Hawks. The CEO and chairman is Japanese billionaire Masayoshi Son. Ken Miyauchi (formerly president of SoftBank Mobile) serves as its President & COO.
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