Sometimes nothing will do but an animal analogy. SoftBank founder Masayoshi Son used buoyant numbers in quarterly results on Monday to paint the $180 billion investment group as a goose laying a series of golden eggs. It’s a throwback to an old favourite image. But more detail on plans for future buybacks and other uses of its growing cash pile would go a long way to supporting the Japanese company if egg production slows.
SoftBank’s shares have been hitting two-decade highs as strong markets helped it profitably sell down stakes and allowed portfolio companies including food delivery firm DoorDash and online property startup Opendoor to debut at high valuations. There was a justifiable hint of smugness in Monday’s presentation as the $100 billion SoftBank Vision Fund, not-so-long-ago panned for illiquid dud investments, posted big investment gains for the December quarter.
Twelve months is a long time in SoftBank-land. This time last year, Son was railing about the undervaluation of his company and activist Elliott Management soon started to push for buybacks and improved governance. Shares have rocketed 250% from the four-year low reached in March. The current market capitalisation of $180 billion is much closer to the updated $220 billion net asset value of SoftBank’s holdings – albeit helped by a sharp fall in the shares of Alibaba, its single biggest holding.
The headline noise and some 200 investments can make it hard to focus on nitty gritty such as SoftBank’s cash pile, now standing at $42 billion before factoring in the sale of chip designer Arm Holdings to Nvidia for an almost equal sum. Son repeated a warning that its more-than-half-complete 2 trillion yen buyback programme may not be concluded by March and emphasised the need for defensive levels of cash but the details stopped there.
By the end of the results presentation, the eggs had begun dancing across his slides. So long as markets are riding high, shareholders will likely keep doing their own jig. But should the mood turn, the fate of those funds will become more important. Best for Son to lay out his plans out ahead of time.