Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Vision Fund head Rajeev Misra will step down from Vision Fund 2 to take a new gig managing money for Midde Eastern partners. His VF1 role is unchanged for now</li>
<li>Structurally, this does not change very much as Son-san has always been the decision maker on investments and we never considered Misra as a candidate for succession</li>
<li>After surviving $47bn in public equity losses over the last year, it surprisingly looks like Misra's departure is voluntary</li>
</ul>


Vision Fund head Rajeev Misra will step down from Vision Fund 2 to take a new gig managing money for Midde Eastern partners. His VF1 role is unchanged for now
Structurally, this does not change very much as Son-san has always been the decision maker on investments and we never considered Misra as a candidate for succession
After surviving $47bn in public equity losses over the last year, it surprisingly looks like Misra's departure is voluntary


<ul>
<li>Didi shares jumped 24% on reports regulatory relief was at hand. That is good news for Softbank although the halo effect boosting Alibaba had more of a valuation impact</li>
<li>Less noticed but also relevant as a potential outcome is the de-listing of Zhangmen Education which fell 50% Monday and is down 97% for VF in total</li>
<li>Softbank shares trade at a 43% discount to fair value and remain range-bound.  Tech market sentiment remains the primary driver and we continue to be cautious</li>
</ul>


Didi shares jumped 24% on reports regulatory relief was at hand. That is good news for Softbank although the halo effect boosting Alibaba had more of a valuation impact
Less noticed but also relevant as a potential outcome is the de-listing of Zhangmen Education which fell 50% Monday and is down 97% for VF in total
Softbank shares trade at a 43% discount to fair value and remain range-bound.  Tech market sentiment remains the primary driver and we continue to be cautious


Softbank Group - Didi Relief and ZME Pain Highlight Multiple Potential Outcomes

<ul>
<li>Valuation losses in the public portfolio have increased by $6bn over two days on weakness at Coupang, Grab, DoorDash and WeWork.  Total losses for the quarter stand at $17bn.</li>
<li>With Alibaba shares still weak, NAV/share has moved decisively below ¥10,000/share and is back to where it in May/June 2020 when tech was first rebounding from the Covid shock.</li>
<li>The discount to NAV stands at 49% but is likely to expand when markets in Japan have a chance to respond to how stocks traded in the US on Friday.</li>
</ul>


Valuation losses in the public portfolio have increased by $6bn over two days on weakness at Coupang, Grab, DoorDash and WeWork.  Total losses for the quarter stand at $17bn.
With Alibaba shares still weak, NAV/share has moved decisively below ¥10,000/share and is back to where it in May/June 2020 when tech was first rebounding from the Covid shock.
The discount to NAV stands at 49% but is likely to expand when markets in Japan have a chance to respond to how stocks traded in the US on Friday.


Softbank Group - Tough Week for VF as Public Portfolio Falls $6bn over Two Days

<ul>
<li>NAV/Share is the lowest since July 2020 largely driven by declines in Alibaba shares (-8% this week and -61% from all-time highs)</li>
<li>A US de-listing for Didi is not necessarily good news for Softbank as the value of that stake will be determined by pricing for a HK listing</li>
<li>The NAV discount has returned to 48% as a less aggressive buyback program does little to drive the share price (not necessarily bad over the long run)</li>
</ul>


NAV/Share is the lowest since July 2020 largely driven by declines in Alibaba shares (-8% this week and -61% from all-time highs)
A US de-listing for Didi is not necessarily good news for Softbank as the value of that stake will be determined by pricing for a HK listing
The NAV discount has returned to 48% as a less aggressive buyback program does little to drive the share price (not necessarily bad over the long run)


Softbank Group - A Very Bad Week as China Drives NAV Weakness and Discount Round Trip

<ul>
<li>PayTM shares fell 27% in their debut as investors seem unhappy with loss-making companies.  Policy Bazaar's Monday listing was better (+40%) but it's not a good sign for Oyo</li>
<li>This is the seventh Q3 listing event for Vision Fund after little activity in Q2 and is consistent with weak performance for 2021 IPOs in general</li>
<li>The buyback is doing its job with shares up 13% in two weeks with the discount moving from 48%to 43%.  We have updated our Softbank and VF tables below</li>
</ul>


PayTM shares fell 27% in their debut as investors seem unhappy with loss-making companies.  Policy Bazaar's Monday listing was better (+40%) but it's not a good sign for Oyo
This is the seventh Q3 listing event for Vision Fund after little activity in Q2 and is consistent with weak performance for 2021 IPOs in general
The buyback is doing its job with shares up 13% in two weeks with the discount moving from 48%to 43%.  We have updated our Softbank and VF tables below


Softbank Group Mixed Early Results for Indian IPOs

United States

WeWork Inc. provides co-working spaces for individuals and entrepreneurs. The Company offers private offices, office suites, headquarters, and custom build out options to fit a variety of office needs, as well as desk spaces and conference rooms. WeWork serves customers worldwide.

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WeWork (WEWKQ US)

Softbank Group - Business as Usual

Vision Fund head Rajeev Misra is departing to run Middle Eastern money. Operationally, not much changes as Son-san has always been the Softbank...

Kirk Boodry

Softbank Group - Didi Relief and ZME Pain Highlight Multiple Potential Outcomes

Good news on Didi and recent gains for Coupang and Goto highlight the potential for Vision Fund companies to re-rate although the delisting of...

Kirk Boodry

Softbank Group - Tough Week for VF as Public Portfolio Falls $6bn over Two Days

Vision Fund's public portfolio has been hammered on weakness at Grab, Coupang and WeWork and QTD losses are approaching the record level from Q2...

Kirk Boodry

Softbank Group - A Very Bad Week as China Drives NAV Weakness and Discount Round Trip

Softbank's value is still tied to Alibaba and other China investments even with a robust buyback. NAV is the lowest since July 2020 and the...

Kirk Boodry

Softbank Group Mixed Early Results for Indian IPOs

PayTM has fallen 27% on its debut and whilst Policy Bazaar's Monday listing was better (+40%) it's not a good sign for the upcoming Oyo IPO. We...

Kirk Boodry

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