Tiger Global takes $1 Billion Stake in SoftBank

Japanese phone company SoftBank’s success for most of its existence has come from the profitable investments made by Masayoshi Son, Founder and CEO of the Company. SoftBank’s stake in Alibaba is worth almost USD 132 Billion, about 40% over its own market capital at USD 94 Billion on Friday. Its stake in Yahoo Japan is also at a USD 8 Billion holding.

Son’s most profitable bets in the technology industry all started with a USD 100 Million in Alibaba and a USD 70 Million stake that ballooned in Yahoo Japan.

SoftBank shares trade at a large discount relative to its shares in other companies. Hedge fund Tiger Global Management evaluated SoftBank’s net asset value to be USD 190 Billion, almost USD 95 Billion above its current total market cap. The discount gap appears to be steep given all of its assets. Son looks to solve the gap with deal-making and its continued ability to make profitable investments.

In the Company’s most recent news, it has sought to shrink by striking a deal to merge Sprint and T-Mobile in April to decrease its share of the American carrier’s financial burden and last week, it announced plans to publicly list its telecommunications unit on the Tokyo Stock Exchange. If the deals go through, the publicly traded venture capital firm holdings will include a 27% stake in Alibaba Group, a 43% stake in Yahoo Japan, a stake in ARM (British computer chip designer), and an investment in his USD 100 Billion Vision Fund that owns stakes in start-ups like Uber and messaging application, Slack.

Tiger Global told investors in a client letter it bought more than USD 1 Billion worth of SoftBank stock and that other shareholders will realize how valuable holdings in it will be. The letter was reviewed by DealBook and executives from Tiger Global stated the disconnect between its holdings and its market value is an “odd anomaly that is unlikely to exist forever.” As before, the future of SoftBank’s stocks and how high it will go will depend on Son’s investment skills.

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