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"Yet it turned out that Agarwal [founder and CEO of a SoftBank-backed startup] had borrowed $2 billion to finance his share of the purchase" According to a rec
by t_mann 7y ago
"Yet it turned out that Agarwal [founder and CEO of a SoftBank-backed startup] had borrowed $2 billion to finance his share of the purchase"
According to a recent article in the Economist, SoftBank encourages its own employees to do the same with SoftBank shares. There is a chance that things go well and they will look like geniusses (like Michael Dell who took his company private in 2013 and returned to markets last year). If things don’t go well, however, they’ll become a case study for Business Schools on business practices to avoid.
- onlyrealcuzzo 7y agoDell looks like a great story because the market is up almost 100% since 2013. It's hard to say it was a good decision on Michael Dell's part. He could've bought anything else with leverage in 2013 and it probably would've turned out equally well or better. Dell isn't exactly doing amazingly.
- smabie 7y agoSo Dell took the company private in 2013 for 24.4bn. Right now the market cap is 34.26bn, most of the value from Dell’s 80% stake in VMWare (worth 65bn). So one it’s face, Dell looks pretty shitty. Since the buyout was announced (Feb 5, 2013), the S&P has returned around 105%. Dell as only returned 40%, mostly due to the massive amount of debt Dell has been loaded with. Anyways I was hoping to make some argument about HP or Lenovo doing worse in that time period.. but after checking, Dell is indeed doing pretty shitty. Maybe I could make some weak argument about once they pay off their debt, but I dunno, he and his leveraged buyout guys could have done better with an index fund.
- perl4ever 7y agoHe could have liquidated everything and bought stock in Apple...