Few fortunes are as volatile as Masayoshi Son’s. The SoftBank Group founder was briefly richer than Bill Gates at the start of the century before tech stocks crashed. Last March, as markets sank under Covid-19 and questions swirled over SoftBank’s investments, his wealth dipped to US$8.4 billion, the lowest since 2016.
Less than a year later, he has more than quadrupled his fortune to US$38 billion ($50.6 billion), according to the Bloomberg Billionaires Index — the highest level since tracking started in 2012.
The surge is closely tied to the rally in SoftBank shares, which represent more than 95% of his net worth and have climbed almost fourfold from a low at the worst of the pandemic-fuelled selloff.
The Vision Fund — the world’s largest investment pool for tech start-ups — posted its best quarterly profit, while SoftBank sold assets, bought back stock and settled a legal dispute with We- Work. It has also gathered supporters such as Elliott Management, along the way.
“SoftBank’s current major assets have huge cash flow and will continue to grow,” said Thomas Hayes, chairman of Great Hill Capital.
“If he balances his harvesting of winners, with appropriately timed share repurchases, he will avoid a repeat of 2000, even if tech stocks moderate.”
SoftBank’s fate has been deeply intertwined with its founder, to the point the relationship recently raised corporate-governance concerns.
Son, who is also chairman and CEO, is personally invested in a unit that poured about US$20 billion into tech stocks and derivatives.
The 63-year-old, who owns one-third of that division and has denied there was a conflict of interest, said the program was a way to put Soft- Bank’s cash pile to use.
To amplify his leverage, Son uses a common tactic among the ultra-rich — borrowing against his stock. He just does it much more than most other billionaires.
Recently though, he has trimmed his pledges as Softbank shares have become more valuable.
Son had committed about one-third of his stake in SoftBank to more than 16 financial institutions as of Feb 9, down from 38% in September, ac- cording to regulatory filings. That still represents about US$18 billion — one of the highest figures among the 500 richest people in the world.
The pledges are used as collateral for loans, whose size could be smaller than the value of the committed shares given the recent rally.
A representative for SoftBank declined to comment for this story.
Shares slipped
After closing at an all-time high on March 3, SoftBank shares slipped 5.3% on March 4 amid a decline in the broader stock market.
Its Vision Fund last month posted a record profit for the final quarter of 2020, thanks to a boost in the value of its stakes in newly-listed firms including food-delivery service DoorDash and Chinese online property platform KE Holdings.
“Since the Vision Fund launched, the number of golden eggs is in accelerating mode,” Son said at a briefing last month. “We are finally in the harvesting stage.”
Some 15 companies have gone public from the Vision Fund, and SoftBank may see between 10 and 20 listings a year from its portfolio of 164 start-ups, he said.
Coupang, a South Korean e-commerce giant, is seeking a US IPO valued at more than US$50 billion. Compass, a US real estate brokerage, has filed for a listing while Chinese truck start-up Full Truck Alliance could go public this year.
SoftBank has also joined the special-purpose acquisition companies (SPAC) bandwagon with plans for several blank-check companies. But SoftBank has also had its share of troubles.
The Vision Fund has written down its US$1.5 billion holding in Greensill Capital and is considering dropping the valuation to near zero, people familiar with the matter have said.
At its worst point last year, investors questioned several of SoftBank’s investments — including WeWork, whose IPO spectacularly imploded.
The turnaround has been rapid. In addition to improving the outlook for the start-ups in the Vision Fund, the rally in tech stocks helped boost the value of SoftBank’s stakes in firms like Uber Technologies.
Softbank also just settled a lawsuit with WeWork and its co-founder Adam Neumann, paving the way for another attempt at a potential listing of the office-sharing company. — Bloomberg
