44.80 +0.32 (0.72%)
After hours: 6:24PM EDT
|Bid||44.48 x 1000|
|Ask||44.60 x 1100|
|Day's range||43.56 - 46.10|
|52-week range||28.39 - 64.05|
|Beta (5Y monthly)||N/A|
|PE ratio (TTM)||N/A|
|Earnings date||04 Aug 2021 - 09 Aug 2021|
|Forward dividend & yield||N/A (N/A)|
|1y target est||69.79|
DoorDash is moving to hold its dominance as COVID-19 lockdowns relax, and vaccines roll out.
(Bloomberg) -- SoftBank Group Corp. plunged by the most since the early days of the coronavirus pandemic after the Japanese company declined to pledge a continuation of buybacks that have propped up its stock.Shares tumbled as much as 8.7% on Thursday, the most on an intraday basis since March of 2020, despite record profit in the March quarter. The company has lost more than 6 trillion yen ($55 billion) in market value in the past three days. Investors are skittish about whether SoftBank will keep buying back its own stock after completing a 2.5 trillion yen allotment for repurchases.“We believed that SoftBank would follow up its massive buyback with another one. But we are extremely surprised that it did not,” Atul Goyal, senior analyst at Jefferies, wrote in a research note. “Without the buyback, SoftBank stock price is likely to reflect the performance of its listed investments.”SoftBank on Wednesday reported net income of 1.93 trillion yen for the three months ended March 31, the most ever for a Japanese company, with essentially all of that coming from its investment in the newly public Coupang Inc. That’s nearly twice the 1 trillion yen tally from the next highest Japanese company, Toshiba Corp.In a presentation after results, founder Masayoshi Son argued that investors aren’t giving him credit for the value he’s creating at SoftBank. With holdings like Coupang and Alibaba Group Holding Ltd., the net asset value for the company is now north of 15,000 yen a share, he said, more than 70% higher than the current share price.“In simple terms, they’re undervalued,” Son said, pacing a stage in Tokyo with a black turtleneck and matching black blazer.SoftBank’s Vision Fund investment arm went from being the source of the biggest loss in SoftBank’s history a year ago to the main driver of earnings, with a 2.3 trillion yen profit in the March quarter. The rally in tech shares boosted Vision Fund profits to three consecutive records, raising the value of holdings in the likes of Uber Technologies Inc. and paving the way for public listings from startups such as Coupang and DoorDash Inc.“Our profit and revenue are both measured in trillions of yen, but just a year ago we had a record loss,” Son said at the briefing. “For SoftBank, profits and losses in trillions of yen are the new normal.”What’s really driven SoftBank shares though, has been its buybacks. Beginning in March of last year, Son announced he would sell assets and repurchase 2.5 trillion yen of his own stock.SoftBank said on Wednesday it has spent all of the money it has allocated -- and investors have been anticipating more buybacks. But Son didn’t commit to further repurchases.“Yes, we will consider buying back our own shares,” he said, stressing there are a lot of factors that go into such a decision and it can’t just be deployed to prop up the share price.Son tried to keep the attention on his startup successes. Coupang, the South Korean e-commerce leader, contributed $24.5 billion to Vision Fund’s profit in the fourth quarter. Auto1 Group SE, a German wholesale platform for used cars which went public in February, contributed $1.8 billion of the gains, while Uber posted a $200 million loss. The Japanese conglomerate doesn’t have to sell equity holdings to book income, so most of its profits are unrealized.“The discount SoftBank is trading at, around 30%, has widened again in recent months, but it’s a far cry from the gap that Son has railed against historically,” said Kirk Boodry, an analyst at Redex Research in Tokyo. “I get his points, but the last two years have shown there can be extreme volatility in returns and little agreement on future prospects.”Son has said that SoftBank could see between 10 and 20 public listings a year. Grab Holdings Inc. will go public in the U.S by July through the largest-ever merger with a blank-check company, valuing the Southeast Asian ride-hailing and delivery giant at about $40 billion. Its Chinese counterpart Didi Chuxing has filed with the U.S. Securities and Exchange Commission for an IPO that could value the company as highly as $70 billion to $100 billion.SoftBank has a portfolio of 224 companies across three different funds as of the end of March. But tech stocks are sliding globally as investors contend with higher U.S. bond yields and concerns about stretched valuations.“We might have seen peak Vision Fund and the markets are already looking ahead,” said Justin Tang, head of Asian research at United First Partners in Singapore. “Some of the reaction is due to the buyback running out, but the correlation to the U.S. tech swoon is particularly visible.”Son did take a victory lap in touting his returns so far. He said that limited partners in the first Vision Fund now have a blended internal rate of return of 22%, compared with negative 1% a year ago. SoftBank’s own IRR for the fund is 39%, while its IRR for the second Vision Fund is 119%.SoftBank also boosted the capital committed to its Vision Fund 2 to $30 billion, up from $20 billion.Son’s controversial program of trading options cost him during the quarter. The company posted a 33 billion yen derivatives loss in the period. While the overall profit in the asset management arm was 46 billion yen in the period, the business still posted a full-year loss of 67 billion yen.SoftBank held a total of $19.9 billion of “highly liquid” securities as of the end of quarter, including a $6.2 billion investment in Amazon.com Inc., $3.2 billion in Facebook Inc. and $1 billion in Microsoft Corp. The operation is managed by its asset management subsidiary SB Northstar, where Son personally holds a 33% stake.The investments were accompanied by derivatives that amplified exposure, a strategy that triggered a backlash from investors. The fair value of SoftBank’s futures and options positions came to $1.6 billion at the end of March, compared with little over $1 billion the previous quarter and $2.7 billion the one before. Long call options on listed stocks have dwindled to $1.6 billion from $4.69 billion half a year ago and short call options on listed stocks declined to $84 million from $1.26 billion of value.During his presentation in Tokyo, Son admitted to mistakes with startups, naming specifically WeWork, Greensill and Katerra. But he argued that SoftBank’s successes have more than made up for such missteps. He said his attitude hasn’t changed that much from a record loss a year ago to a record profit now.“I’m not overjoyed or depressed so easily, just stay calm,” he said(Updates with shares from second graph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- The Diem Association, a group of Facebook Inc. and 25 other companies and nonprofit groups once known as Libra, is moving its main operations to the U.S. and partnering with a bank to issue a cryptocurrency backed by U.S. dollars.The new plan includes an agreement with Silvergate Capital Corp., a prominent player in the cryptocurrency industry, which will issue the coin and manage Diem’s reserve of U.S. dollars, the association said Wednesday in a statement.Diem said it’s still building out a global payments network, with the idea that it could serve its own stablecoin or even central bank digital currencies if world governments decide to issue them.“It’s critical for the U.S. to foster innovation in this space. The U.S. can’t really afford to fall behind here,” said Diem Chief Executive Officer Stuart Levey. Levey said Diem’s payments network will be able to lower the cost of sending money around the world, whether it’s through a Diem-issued coin or the central-bank digital currencies that many countries are considering.Shares of Silvergate Capital jumped about 20% in extended trading after the deal’s announcement.While more straightforward to achieve, the new plans are a big comedown from the vision unveiled by the Libra Association in 2019.That June, Facebook and 27 partners announced the project to great fanfare with large ambitions. The Libra Association, as the Diem Association was then known, said it planned to launch a global stablecoin backed by a basket of currencies, including the U.S. dollar, euro and others.The blowback from world governments was fierce. Even though Facebook executives said they were just one of equal partners in the association, U.S. lawmakers said its involvement gave them concerns about protecting user data or giving the already powerful company a toehold in financial services. Some lawmakers even posited that libra could be a threat to the U.S. dollar as the world’s reserve currency.Amid the criticism, the Libra Association lost some of the members most equipped to address financial regulators, including Visa Inc., Mastercard Inc., and PayPal Holdings Inc. Eventually, the Libra Association decided to delay the launch of a multi-currency coin in favor of separate cryptocurrencies linked to individual countries’ money. The association also rebranded as Diem, but never received a necessary license from the financial regulator in its headquarters country of Switzerland.Now, Diem’s ambitions are tightening once again. The association’s members currently include Facebook, crypto-focused companies like Coinbase Global Inc., and others such as ride-hailing company Uber Technologies Inc. and commerce platform Shopify Inc. Diem said while it expected eventual approval in Switzerland, it’s withdrawing the application for its license and moving most operations to the U.S.Diem’s U.S. subsidiary plans to register as a money-services business with a division of the U.S. Treasury Department.Though Diem’s path forward might be easier that Libra’s, the association could struggle to explain how the project differs from myriad dollar-backed stablecoins that already exist, such as USD Coin.In an interview, Levey said the association believes that the way it’s implementing the coin, with built-in consumer protections and anti-crime provisions, will be appealing to regulators and companies that want to use the network.Many central banks, including those of the U.S., Europe and China, are in the process of researching or building their own digital currencies. If those come to pass, Levey said, Diem can adjust its network to accommodate them.Diem declined to say when the pilot would launch.(Updates with Silvergate share price move in the fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.