Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Softbank – Uuuge Buyback!... Aaand It’s Gone

Softbank Group Q2 21 Results Reaction: Softbank May Intend to Use ARM Proceeds for Buyback

That Upcoming $3-4bn SELL on Softbank Group (9984)

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Quiddity Advisors

Event-Driven

<p>Today with its earnings report (<a href="https://group.softbank/system/files/pdf/ir/financials/financial_reports/financial-report_q2fy2021_01_en.pdf" target="_blank" rel="noopener">report</a>, and 49MB pdf <a href="https://group.softbank/system/files/pdf/ir/presentations/2021/earnings-presentation_q2fy2021_01_en.pdf" target="_blank" rel="noopener">presentation</a>), <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a><a href="https://group.softbank/system/files/news/press/2021/20211108/pdf/20211108_en.pdf" target="_blank" rel="noopener">announced a buyback</a>. It is ¥1 trillion or <em>nine billlyun dollars.</em> </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/432/original/billiondollarsdrevilgif.gif?1636379447" class="editor-image img-responsive" data-smartkarma-image-id="240432"></figure><p></p></section><p>I will let <a href="https://www.smartkarma.com/profiles/kirk-boodry" target="_blank" data-smartkarma-citation="accounts:1920" rel="noopener">Kirk Boodry</a> comment on earnings after the press conference. He has written in <a href="https://www.smartkarma.com/insights/softbank-group-q2-21-results-reaction-softbank-may-intend-to-use-arm-proceeds-for-buyback" target="_blank" data-smartkarma-citation="insights:60343" rel="noopener"><em>Softbank Group Q2 21 Results Reaction: Softbank May Intend to Use ARM Proceeds for Buyback</em></a>.  I urge you to check his piece both for a comment on Q2 earnings - much of which he has already previewed in discussion comments* - and for an updated look at the Discount to NAV calculations (I have my own which at this point exactly matches his, but his chart is much prettier).</p><div class="content-remarks"><p>* Yeah, those are really useful on occasion, and I urge Smartkarma readers to tailor their watchlists (people, tickers, and "verticals" to follow) and to use the appreciate button on insights you find valuable (which will get you a notification when the author adds a discussion comment to the bottom of the insight).</p></div><h3>The Buyback</h3><p>The buyback programme as announced is to spend up to ¥1 trillion buying back up to 250,000,000 shares. Whichever limit is reached first is the limit for the programme. Of course, Softbank has a history of announcing new programmes before the old one is even finished if it has not had the appropriate effect. </p><p>In this case, the appropriate effect would be a narrowing of the Discount to NAV. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/412/original/Screenshot+2021-11-08+at+7.50.26+PM.png?1636372255" class="editor-image img-responsive" data-smartkarma-image-id="240412"></figure></section><p>The buybacks in summer and winter of 2020 saw ¥500bn bought in a quarter where this one suggests a ¥1 trillion buyback could take a year. </p><p>There are reasons for that. Some obvious, some less so.</p><p>And it is important to look at the modalities. </p>

Today with its earnings report (report, and 49MB pdf presentation), Softbank Group (9984 JP)announced a buyback. It is ¥1 trillion or nine billlyun dollars. I will let Kirk Boodry comment on earnings after the press conference. He has written in Softbank Group Q2 21 Results Reaction: Softbank May Intend to Use ARM Proceeds for Buyback.  I urge you to check his piece both for a comment on Q2 earnings - much of which he has already previewed in discussion comments* - and for an updated look at the Discount to NAV calculations (I have my own which at this point exactly matches his, but his chart is much prettier).* Yeah, those are really useful on occasion, and I urge Smartkarma readers to tailor their watchlists (people, tickers, and "verticals" to follow) and to use the appreciate button on insights you find valuable (which will get you a notification when the author adds a discussion comment to the bottom of the insight).The BuybackThe buyback programme as announced is to spend up to ¥1 trillion buying back up to 250,000,000 shares. Whichever limit is reached first is the limit for the programme. Of course, Softbank has a history of announcing new programmes before the old one is even finished if it has not had the appropriate effect. In this case, the appropriate effect would be a narrowing of the Discount to NAV. The buybacks in summer and winter of 2020 saw ¥500bn bought in a quarter where this one suggests a ¥1 trillion buyback could take a year. There are reasons for that. Some obvious, some less so.And it is important to look at the modalities. 

Softbank Buyback - $9 Biiiilllyun Dollars