Softbank’s journey to the universe has left investors out of balance


SoftBank Group Company Update

In the four years since the founding of SoftBank, Sun Zhengyi has perfected eye-catching presentation slides. Telepathic pet; doomed lover; Sad pie chart; The unicorn is soaring over the canyon. Without a remote clarification strategy, these gems have confirmed that their creator is a CEO, and their ideas are too galactic for PowerPoint.

However, according to analysts and SoftBank long-term investors, last week, Sun Zhengyi’s ability to explain one of the world’s most fascinating companies on stage, face to face, and in clear words once again disappointed him.Even on major issues in China, he also announced Suspension of new investment While emphasizing the key role of the state in the future of his business, the lack of details is also prominent.

People with first-hand experience said that when he talked to investors alone or in small groups, Sun Zhengyi’s description of Softbank was very clear and convincing. In other cases, the situation is puzzling. Last week, as the company announced its first-quarter results, it will celebrate its 40th birthday next month, and it is trying to inject vitamins into a stock price that is 38% lower than in March. The difference seems to be greater than ever.

There are several signs that not everything is fine. It first appeared during Sun Zhengyi’s attempt to define Softbank-this market segment felt more like a chore arranged by a painful investor relations department than something the founder actively enjoyed.The obstacle is considerable: because the group separated its telecommunications business and announced plans Sold chip designer Arm, Shareholders have always believed that SoftBank is a technology investment group-these three words, depending on the timing, may bring three kinds of market discounts.

For some time, investors have been complaining that they want a more substantive definition, and at last week’s event, Sun Zhengyi put forward the “vision capitalist”. He introduced this sentence for the first time at the annual shareholder meeting in June. Putting it on a T-shirt may look very inspirational. Few people would doubt that SoftBank is the world’s largest vision capitalist. But for now, it is not wise to leave the market.

For many people, the definition requires a clear, constantly updated blueprint that explains what the vision really is—and to what extent anyone at SoftBank except Sun Zhengyi can share and understand it—make the “capitalist” part Get a premium on SoftBank stock.

In a related revelation, Sun Zhengyi told minority shareholders in a conference call after the results were announced that he tried to persuade nervous SoftBank board members to invest more of their own funds. Vision Fund Already sputtered. Obviously, he found their timidity depressing. It is not clear whether he has some inferences that investors (no matter how loyal) might draw from this story.

When Sun Zhengyi shifted the focus of his speech to the breakdown of the company’s net asset value, the second problem appeared-as of June 30, this figure was 239 billion U.S. dollars. The plan aims to alleviate concerns by emphasizing that listed companies account for 87% of net assets.

Because these holdings are listed, and as Sun Zhengyi said, because their value is constantly “checked and priced on a global scale,” SoftBank investors should feel more at ease about the valuation of their investment portfolio. By extension, with almost undisguised subtext, they should be just like Sun Zhengyi, angry at SoftBank’s current market value of approximately US$100 billion.

Such a huge discount seems to justify the generous stock repurchase program. Sun Zhengyi failed to confirm that such a plan disappointed investors, and analysts are also struggling to find where the catalyst for stock price recovery might come from.

Even more unpleasant is the paradox in Sun Zhengyi’s analysis. He seems to be saying that investors should be more confident in the market’s valuation of SoftBank’s listed asset portfolio, but they are less confident in their valuation of SoftBank itself. If he envisions using a slide to capture this paradox—perhaps an illusion that can be regarded as a duck and a rabbit—it does not appear in the presentation.

At the same time, an unexpected truth about SoftBank and Sun Zhengyi may be emerging-that “vision capitalists” are much more cautious and acting than this sentence and speech implies. Twenty-five years ago, Sun Zhengyi made a big bet on the Internet because he believed that the Internet was transformative. Now he is using artificial intelligence to do the same thing.

Sun Zhengyi explained the company’s difficulties to the market, the core of which may stem from his extraordinary ability as a salesperson. He is eager to load the Softbank Rockets with a vision for the future centuries later. But his enthusiasm may prevent him from seeing the possibility that futuristic fanaticism is freight, not rocket fuel.

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