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> The dotcom crash of 2001 wiped out 99% of SoftBank’s market value. > But one investment—$20m sunk into Alibaba—is regarded as one of the best in history. The

> The dotcom crash of 2001 wiped out 99% of SoftBank’s market value. > But one investment—$20m sunk into Alibaba—is regarded as one of the best in history. The Chinese internet titan went public in 2014 in the world’s biggest IPO. SoftBank’s 28% stake in the firm is now worth $140bn. Kind of mind-boggling who the real titan is here: Alibaba. Both Softbank and the late Yahoo (USA)'s core value were derived solely on Alibaba's market cap, able to prop up whole other companies. I've always assumed that Softbank was getting its money from Softbank, but surprising to learn they derived most of their value from Alibaba stock just like Yahoo. If you've ever seen their Pepper robots, it's pretty indicative of how dysfunctional their main offerings are. The robot is somehow everywhere in Japan, but 100% useless as well.

ekianjo 9y ago
Yeah Pepper was just some PR effort. This is a dumb robot with an integrated tablet that is asking you to click on it. Its just ridiculous.
minikomi 9y ago
I've interacted with the robot a few times at stores and every time I've come away feeling more annoyed with technology. It really is a shoddy piece of work.
onetimemanytime 9y ago
> The dotcom crash of 2001 wiped out 99% of SoftBank’s market value. > But one investment—$20m sunk into Alibaba—is regarded as one of the best in history. The Chinese internet titan went public in 2014 in the world’s biggest IPO. SoftBank’s 28% stake in the firm is now worth $140bn. Frankly that's luck. No doubt he is smart and has smart people working for him but that's pure luck. All but one gone and that tiny $20 mil investment saves it all.
- thankthunk 9y ago
  > Frankly that's luck. No doubt he is smart and has smart people working for him but that's pure luck. All investment is "luck" if you put it that way. > All but one gone and that tiny $20 mil investment saves it all. That investment didn't save it all. Softbank was a multibillion dollar company before and after their investment in alibaba. With or without alibaba, they would still be around. Not sure where you are getting the idea that alibaba saved softbank. Softbank's Alibaba stake makes softbank very valuable, but it would be around without alibaba.
  - onetimemanytime 9y ago
    >>Not sure where you are getting the idea that alibaba saved softbank. Softbank's Alibaba stake makes softbank very valuable, but it would be around without alibaba. Without Alibaba they would have lost, say, 100% of their investment in the 90's. Makes a great "trust us with $100 Billion, we have a great record" pitch. Also, "still being around" and worth a lot of money and still being trusted with investment money are two very different things.
- deleted 9y ago
  [deleted]
jpatokal 9y ago
Softbank's core business is being a mobile phone operator. They originated as Vodafone Japan and were distinctly third-tier for a long time, but they were the first in Japan to sell the iPhone and absolutely minted money in the first few years until the incumbents (NTT Docomo and KDDI) caught up: https://i0.wp.com/www.eurotechnology.com/b/wp-content/uploads/2014/05/japan_telecoms_revenues_2000.jpg?resize=2000%2C1200 https://i0.wp.com/www.eurotechnology.com/b/wp-content/upload...
- JimboOmega 9y ago
  TIL. Before I read these comments I figured that Softbank was... well... a bank.
  - kyle-rb 8y ago
    Based on their commercials, I assumed their business had something to do with talking dogs.
- aikinai 9y ago
  I think you just recited the history of your awareness of Softbank, which is very different from the actual company history and business. Softbank didn't originate with Vodafone; it was already 25 years old and a sprawling conglomerate, well-known for many ventures, when it acquired the mobile operator. Also, your chart doesn't fit your story. Softbank offered the iPhone in 2008 and the other carriers got it in 2012–2013, but that corresponds to a dip and then a very modest gain in the chart.
tw334 9y ago
Even Pepper is an acquisition of a French company called Aldebaran.
agibsonccc 9y ago
Softbank actually has numerous business units ranging from reselling/distribution of various products to monetizing telco data. I would be careful to even call them just a telco. I can say for a fact they have other robotics efforts as well. Yes they have not had the best luck in monetizing them. Ironically, we are associated with some of their newer R&D efforts in robotics: https://skymind.ai/press/softbank https://skymind.ai/press/softbank I can say they have not made ideal decisions in a lot of areas, but I wouldn't count them out based on 1 bad robot. They are a lot more diverse than that. Source: I have softbank as a customer, have dealt with numerous executives here, and actually live in japan. I don't just read the news.
- chrischen 8y ago
  If Peper is not their best robot why are they so heavily promoting it? (There was even one in SF at the Westfield)
hkmurakami 8y ago
Is Berkshire's value derived from their corporate holdings or their reinsurance business? Cash for investments have to come from somewhere.
adventured 9y ago
The only investment of a VC style I've seen in the last few decades that surpasses Softbank's return on Alibaba, is Naspers with Tencent. Until their recent $10b sale of some shares, they owned 1/3 of Tencent. "The stake Naspers bought for just $32 million in 2001 -- when Tencent was an obscure Web firm in a nation where few people used the Internet -- is now worth $175 billion." "While the investment has made Naspers the most valuable company in Africa, its market capitalization of about $122 billion lags well behind the value of the Tencent holding, suggesting investors assign no value to its other businesses." https://www.bloomberg.com/news/articles/2018-03-22/naspers-sells-10-6-billion-of-tencent-to-fund-investments https://www.bloomberg.com/news/articles/2018-03-22/naspers-s... There have been a few massive percentage returns that have been similarly outsized over the years, not equal to the top line scale however. Peter Thiel's investment into Facebook produced something like a 5,000 fold return. The parents of Jeff Bezos put $50,000 into Amazon in its initial $1m round, which has produced something around a $2b to $3b fortune for them (a ~40,000+ fold return). There have also been some infamous misses that would have produced comparably extreme returns. Paul Allen owned 25% of AOL right before it become a giant; he sold his position for a few hundred million dollars in a fit, because they wouldn't allow him to buy a larger position in it; that stake would have solidly been worth $40 billion at the peak. [1] Larry Ellison wanted to buy a very large position in Apple, in the process of returning Jobs to the CEO role. Jobs talked him out of it on a moral high ground basis. [2] It's hard to speculate what that might be worth today or if Ellison would have screwed everything up instead, could have been a couple hundred billion dollar miss. [1] https://www.forbes.com/forbes/1999/1115/6412186a.html https://www.forbes.com/forbes/1999/1115/6412186a.html [2] https://www.cultofmac.com/428587/larry-ellison-steve-jobs-shot-down-my-apple-takeover-plans/ https://www.cultofmac.com/428587/larry-ellison-steve-jobs-sh...
- onetimemanytime 8y ago
  Ellison is probably (most likely) not the type that likes to not meddle in things, so Apple might not have been worth anything similar to what it is now. Excite had the chance to buy Google way back, IIRC, for $800K by Larry and Sergey. Probably the tech would have died down there, but the founders hired the right people, chased money instead of ethics and Google is worth 3/4 of a TRILLION.
ThrustVectoring 8y ago
The median stock in the S&P 500 has a negative return, too. Stock market returns are pretty much entirely generated by the right tail of the distribution - you have to make many bets to be ensured of getting enough winners to carry your investment.

ekianjo 9y ago

Yeah Pepper was just some PR effort. This is a dumb robot with an integrated tablet that is asking you to click on it. Its just ridiculous.

minikomi 9y ago

I've interacted with the robot a few times at stores and every time I've come away feeling more annoyed with technology. It really is a shoddy piece of work.

onetimemanytime 9y ago

thankthunk 9y ago
> Frankly that's luck. No doubt he is smart and has smart people working for him but that's pure luck. All investment is "luck" if you put it that way. > All but one gone and that tiny $20 mil investment saves it all. That investment didn't save it all. Softbank was a multibillion dollar company before and after their investment in alibaba. With or without alibaba, they would still be around. Not sure where you are getting the idea that alibaba saved softbank. Softbank's Alibaba stake makes softbank very valuable, but it would be around without alibaba.
- onetimemanytime 9y ago
  >>Not sure where you are getting the idea that alibaba saved softbank. Softbank's Alibaba stake makes softbank very valuable, but it would be around without alibaba. Without Alibaba they would have lost, say, 100% of their investment in the 90's. Makes a great "trust us with $100 Billion, we have a great record" pitch. Also, "still being around" and worth a lot of money and still being trusted with investment money are two very different things.
deleted 9y ago
[deleted]

jpatokal 9y ago

Softbank's core business is being a mobile phone operator. They originated as Vodafone Japan and were distinctly third-tier for a long time, but they were the first in Japan to sell the iPhone and absolutely minted money in the first few years until the incumbents (NTT Docomo and KDDI) caught up: https://i0.wp.com/www.eurotechnology.com/b/wp-content/uploads/2014/05/japan_telecoms_revenues_2000.jpg?resize=2000%2C1200 https://i0.wp.com/www.eurotechnology.com/b/wp-content/upload...

JimboOmega 9y ago
TIL. Before I read these comments I figured that Softbank was... well... a bank.
- kyle-rb 8y ago
  Based on their commercials, I assumed their business had something to do with talking dogs.
aikinai 9y ago
I think you just recited the history of your awareness of Softbank, which is very different from the actual company history and business. Softbank didn't originate with Vodafone; it was already 25 years old and a sprawling conglomerate, well-known for many ventures, when it acquired the mobile operator. Also, your chart doesn't fit your story. Softbank offered the iPhone in 2008 and the other carriers got it in 2012–2013, but that corresponds to a dip and then a very modest gain in the chart.

tw334 9y ago

Even Pepper is an acquisition of a French company called Aldebaran.

agibsonccc 9y ago

Softbank actually has numerous business units ranging from reselling/distribution of various products to monetizing telco data. I would be careful to even call them just a telco. I can say for a fact they have other robotics efforts as well. Yes they have not had the best luck in monetizing them. Ironically, we are associated with some of their newer R&D efforts in robotics: https://skymind.ai/press/softbank https://skymind.ai/press/softbank I can say they have not made ideal decisions in a lot of areas, but I wouldn't count them out based on 1 bad robot. They are a lot more diverse than that. Source: I have softbank as a customer, have dealt with numerous executives here, and actually live in japan. I don't just read the news.

chrischen 8y ago
If Peper is not their best robot why are they so heavily promoting it? (There was even one in SF at the Westfield)

hkmurakami 8y ago

Is Berkshire's value derived from their corporate holdings or their reinsurance business? Cash for investments have to come from somewhere.

adventured 9y ago

The only investment of a VC style I've seen in the last few decades that surpasses Softbank's return on Alibaba, is Naspers with Tencent. Until their recent $10b sale of some shares, they owned 1/3 of Tencent. "The stake Naspers bought for just $32 million in 2001 -- when Tencent was an obscure Web firm in a nation where few people used the Internet -- is now worth $175 billion." "While the investment has made Naspers the most valuable company in Africa, its market capitalization of about $122 billion lags well behind the value of the Tencent holding, suggesting investors assign no value to its other businesses." https://www.bloomberg.com/news/articles/2018-03-22/naspers-sells-10-6-billion-of-tencent-to-fund-investments https://www.bloomberg.com/news/articles/2018-03-22/naspers-s... There have been a few massive percentage returns that have been similarly outsized over the years, not equal to the top line scale however. Peter Thiel's investment into Facebook produced something like a 5,000 fold return. The parents of Jeff Bezos put $50,000 into Amazon in its initial $1m round, which has produced something around a $2b to $3b fortune for them (a ~40,000+ fold return). There have also been some infamous misses that would have produced comparably extreme returns. Paul Allen owned 25% of AOL right before it become a giant; he sold his position for a few hundred million dollars in a fit, because they wouldn't allow him to buy a larger position in it; that stake would have solidly been worth $40 billion at the peak. [1] Larry Ellison wanted to buy a very large position in Apple, in the process of returning Jobs to the CEO role. Jobs talked him out of it on a moral high ground basis. [2] It's hard to speculate what that might be worth today or if Ellison would have screwed everything up instead, could have been a couple hundred billion dollar miss. [1] https://www.forbes.com/forbes/1999/1115/6412186a.html https://www.forbes.com/forbes/1999/1115/6412186a.html [2] https://www.cultofmac.com/428587/larry-ellison-steve-jobs-shot-down-my-apple-takeover-plans/ https://www.cultofmac.com/428587/larry-ellison-steve-jobs-sh...

onetimemanytime 8y ago
Ellison is probably (most likely) not the type that likes to not meddle in things, so Apple might not have been worth anything similar to what it is now. Excite had the chance to buy Google way back, IIRC, for $800K by Larry and Sergey. Probably the tech would have died down there, but the founders hired the right people, chased money instead of ethics and Google is worth 3/4 of a TRILLION.

ThrustVectoring 8y ago

The median stock in the S&P 500 has a negative return, too. Stock market returns are pretty much entirely generated by the right tail of the distribution - you have to make many bets to be ensured of getting enough winners to carry your investment.