19 hours ago
- SoftBank's shareholder meeting featured slides with golden eggs representing ¥1 trillion in NAV and a minus sign for debt, reflecting its investment model.
- There are two softbanks: SoftBank Corporation (Japanese consumer businesses) and SoftBank Group (holding company for Vision Funds and investments).
- SoftBank's model involves taking on debt to invest in companies that go public ("laying golden eggs"), but relies on converting investments into liquid assets or margin loans.
- SoftBank has $76.4 billion in total debt, with ARM, Vision Fund 1, and Vision Fund 2 comprising most of its NAV of ¥48.2 trillion (not ¥74 trillion).
- OpenAI is Masayoshi Son's final major gamble, with over $60 billion committed, but its IPO uncertainty and failure to secure a $6 billion margin loan signal risks.
- SoftBank is overleveraged: 85% of ARM shares and 70% of SoftBank Corp shares are tied up in loans, and it has sold stakes in Alibaba, T-Mobile, and NVIDIA.
- The company's future depends on OpenAI's public listing and sustained high AI demand, but its cashflows are insufficient, and it faces a $40 billion bridge loan maturity in March.
- SoftBank's existence relies on Son's ability to keep gambling; it avoided collapse in 2023 by selling Alibaba shares, but current leverage is historically extreme.