Hello everyone, I am Shuipi. Welcome to the ESG living room. Let’s talk about Masayoshi Son’s big defeat today.
August 8 was originally a very good day; but for the 64-year-old Masayoshi Son, it was a unforgettable day.
html lost nearly 5 trillion yen in 36 months
This day, SoftBank Group held a financial report meeting. At the press conference that day, Masayoshi Son spent more than an hour to publicly criticize himself, and even put a portrait on the first page of SoftBank PPT that had nothing to do with the theme, which was a self-portrait of Tokugawa Ieyasu .
Tokugawa Ieyasu was an ever-winning general. His only defeat in his life was because he made the mistake of underestimating the enemy and advancing rashly. So after the defeat, he ordered the painter to record his appearance of fleeing in a panic and use it as a warning to himself. Obviously, Masayoshi Son is using Tokugawa Ieyasu to allude to the dilemma he faces.
Because SoftBank's financial report shows that the company's net loss in the second quarter was 3.16 trillion yen, or approximately RMB 158.9 billion, setting the highest loss record in Japanese companies' history! Adding to the 1.7 trillion yen net loss in the first quarter, it is approximately RMB 89.9 billion.
In other words, SoftBank lost nearly 5 trillion yen in 6 months, equivalent to nearly 250 billion yuan in RMB.
for such a huge loss, Masayoshi Son blamed it on the sharp drop in U.S. stocks and the depreciation of the yen. However, this is only part of the factor, and the important reason for triggering huge losses is actually that the valuation is slowly shattering!
The largest bubble in the primary market
Everyone should know that there has always been a saying in the venture capital industry that "SoftBank's Vision Fund is the largest bubble in the primary market."
Because Masayoshi Son has always pursued the investment logic of "strike high and fight high", which is to help high-tech companies continuously expand their market share, occupy a leading position in the industry, thereby creating higher valuations and greater development space.
utilizes this investment logic. In just a few years, SoftBank's Vision two phases of fund , with a total scale of US$116.3 billion, investing 370 projects. Last year alone, it invested US$38 billion and invested in 183 companies, setting a record in the venture capital industry.
So, this kind of crushing strategy that is willing to give a high valuation , dares to give valuation , and does not care about valuation , can indeed create huge success effects in the early stages of capital liquidity and global technological changes , such as Alibaba .
However, as the risk of economic recession increases and the liquidity of capital market tightens, market funds begin to tend to risk aversion, so naturally no one dares to pay for ultra-high valuations anymore. Then SoftBank's companies that invest heavily in the early stage will experience a decline in valuation.
For example, when Coupang, a Korean e-commerce company called "Korean Alibaba", was listed on on on last year, it once created a book return of about $34 billion for its largest shareholder SoftBank. However, as the share price of continues to fall, from the issue price of $35 to the current $19, it has brought SoftBank an unrealized loss of $4.3 billion.
SoftBank invested about US$10 billion in WeWork, which once pushed WeWork's valuation to the peak of US$47 billion, but WeWork fell before it went public. Its current valuation is only US$2.9 billion, less than a fraction of the previous ones. The same scenario also happened to Uber, Didi, and SenseTime.
The giant's turn
So, in order to make up for the huge losses, cashing out to survive has become the most urgent task of Masayoshi Son at the moment.
On the one hand, he sold 1/3 of Alibaba's stock and cashed out about US$22 billion (approximately RMB 146.9 billion) to fill SoftBank's current loss hole.
On the other hand, it accelerates the "clearance" sale of assets in hand, and even "sells" at a low price at a bargain. Since March this year, SoftBank has cleared its holdings of Uber, , Beike Real Estate 6, as well as investments in autonomous driving, medical care, asset management and other fields, and has also reduced its holdings in 284 companies in its portfolio.
It can be said that Masayoshi Son is paying for the high valuation bubble he has blown up in the past! It is worth noting that Masayoshi Son's current situation is just a microcosm, and a similar scene is also being staged in China.
0 At the beginning of August, Tencent stock price plunged , falling below the HK$300 mark, returning to five years ago overnight, and then delivered the worst financial report in history. In addition to the performance being lower than expected, what is more important is that through the financial report, we saw that Tencent has started the "spreading" mode, closed some products, and cleared up many non-core investments.
, let’s sort out the situation. Tencent’s recent major share reduction actions have been targeting HaiLan Home , JD Group, BBK , New Oriental Online , and Huayi Brothers.
It can be said that the turn of these giants represents the past of an era. After the ups and downs of the Internet and the new economy, yesterday's carnival is turning into today's tears.
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