TheEconomistOctober 17th 2020 531E
arlier thisyear the covid-19 pandemic
brought SoftBank Group to its knees. As
bondholders fled heavily indebted firms,
the junk-rated Japanese tech conglomerate
looked shaky. In March its flamboyant
boss, Son Masayoshi, announced a $41bn
sale of assets to return to stability.
Mr Son has since regained his foot-
ing—or at least his chutzpah—enumerat-
ing the upsides of coronavirus lockdowns
for his firm. The “new normal”, in which
meetings, food delivery, education, medi-
cal care, shopping and entertainment are
mediated online, he said in September, is a
boon to SoftBank. He has long invested
around a grand vision of a digital transfor-
mation and ubiquitous artificial intelli-
gence (ai). Covid-19 means it is coming to
pass much more rapidly than expected.
Having mostly dumped its telecoms activ-
ities outside Japan, SoftBank is wholly de-
voted to Mr Son’s technophilic passions.
The digital surge is helping the group’s
underperforming Vision Fund, a $99bn
tech-investing vehicle. The fund started
deploying capital in 2017 in a cloud of hype
and optimism but lost its way as a result of
a few spectacular failures, most notably theimplosion of WeWork, an office-subleas-
ing firm masquerading as a tech platform.
Even though SoftBank contributed only
$28bn of the Vision Fund’s capital (equal to
around 12% of the Japanese firm’s assets at
the time), the mishaps hurt its share price
and Mr Son’s reputation as a brilliant inves-
tor. That reputation was acquired after his
purchase, starting in 2000, of a 34% stake
in a Chinese e-commerce startup called
Alibaba, now China’s most valuable listed
company. The pandemic has hurt valua-
tions of some Vision Fund firms in indus-
tries such as hospitality and transport. MrSon has struggled to raise outside money
for a sequel, Vision Fund 2, which was aim-
ing for $108bn in capital but now makes do
with small sums from SoftBank.
Unsurprisingly, then, these days the
Japanese firm steers attention away from
the Vision Fund. This leaves a mystery over
where Mr Son will direct his energy and
cash next. His selling spree did not end
with the asset sales announced in March.
This year SoftBank has completed an un-
precedented number of disposals.
The firm has offloaded most of its
mobile-telecoms assets, including another
slice of its Japanese mobile business, Soft-
Bank Corp, and the whole of Sprint, Ameri-
ca’s fourth-largest mobile operator, and of
Brightstar, a distributor of wireless gear. In
September Mr Son announced the sale of
Arm, a Britain-based chip-designer, for
$40bn to Nvidia, a big American chipmak-
er. Arm was the lynchpin of Mr Son’s en-
visioned ecosystem of huge web- and ai-
powered startups. Even some of his top
executives were confounded to see it go.
Excluding the sale of Arm, which will
take months to complete, SoftBank has
amassed $52bn from the divestments. In-
vestors do not expect the hyperactive Mr
Son to sit on it for long. Three different
paths appear open to him. One scenario is
to activate long-discussed plans to take
SoftBank private. Second, he may be pre-
paring to take a large stake in one or more
publicly listed technology giants. In Sep-
tember SoftBank pulled off another sur-
prise when it emerged as the mystery “Nas-
daq whale” that had snapped up billions ofSoftBankWhat Masa does next
Can the coronavirus-induced digital revolution restore Son Masayoshi’s
reputation for investing brilliance?Business
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