3 ms·

Is SoftBank the worst investment firm of all time

samstave 6y ago
You know, i would say no. I would actually like to thank softbank for taking the risks that it did, as it should be a very interesting business study to look at what, and how, they did what they did. They made collosal mistakes/mis-judgements, sure - but look at how much can be learned from what they have done. I would like to know even more about all the details of what they have done. I would like to see if i could learn - even for just the acedemic aspect of it - all the mistakes they made, their reasonings behind what decisions they made etc. Its a fascinating study, if you think about it. Look at the companies we are talking about they failed upon; uber, we-work and oyo are mentioned just in this HN thread. All of which are “household names” to silicon valley. Recall the articles about how OYO was “revolutionizing what we thought of hotels.... Man, that guy/company got mad press praise. So, i want to learn as much as i can about everything softbank did.
gruturo 6y ago
That, and the name of the fund ended up being hilariously wrong. They have invested in things where a 10 year old could have pointed out obvious fallacies. Saudi investors must be really pissed off, they look like complete fools now (having just been parted with quite a bit of their money). If I were Masayoshi Son, I wouldn't step in a Saudi embassy for all the money in the world now. Oh well if they blow up it's actually capitalism working right for once. Too bad they own ARM, that's more or less the only thing of value that could be lost imho.
- disgruntledphd2 6y ago
  ARM will just get sold to someone else. They own a bunch of Alibaba too, to be fair.
  - Traster 6y ago
    I find it very difficult to see where ARM fits, it really should be an independent company. Since everyone who sees the most value in buying it shouldn't be allowed to. Can you imagine if Apple snapped it up? Or Qualcomm? Or even Intel?
    - sah2ed 6y ago
      > Can you imagine if Apple snapped it up? Or Qualcomm? Or even Intel? Apple perhaps, but they tend to avoid generic M&A like this. They tend to only do M&A when there is a very strong fit; they’ll happily continue to license ARM’s IP. The others each have offerings that compete with ARM, so on that alone, they wouldn’t be able to close the sale unless regulators are completely asleep at the wheel.
      - jdmg94 6y ago
        There's heavy speculation of Apple ditching Intel for the ARM platform, it'd be interesting to see if it could actually happen. It has to be an opportunistic move
    - jdmg94 6y ago
      Apple has the deepest pockets in the list you gave there, and they have skin in the chip manufacturing business. Shit's about to get interesting.
    - microtherion 6y ago
      You may recall that ARM started out as a joint venture involving, among other companies… Apple! Apple got rid of their investment around the turn of the millenium, which in retrospect might not have been the most savvy investment strategy.
  - puranjay 6y ago
    I would be worried about Alibaba as well given how the world has been building up momentum for a China-USA decoupling.
- jrumbut 6y ago
  Some very quick Googling came up with ominous signs of the tech bubble bursting (in 2011): https://www.nytimes.com/2011/06/20/technology/20cashout.html https://www.nytimes.com/2011/06/20/technology/20cashout.html “We are not sure that the valuations we are seeing are sustainable in the long term” Also 2015: https://www.inc.com/magazine/201509/jeff-bercovici/are-we-in-a-tech-bubble.html https://www.inc.com/magazine/201509/jeff-bercovici/are-we-in... "Private valuations have become disconnected from public reality" If you bought Amazon when it was valued at $50 billion, you would have (small) profits even if you bought 20 WeWorks at $50 billion as well. If you could bring it down to 10 WeWorks per Amazon you'd make enormous returns. Not sure I'd want to hand over my non-existent fortune to Masayoshi Son, but I wouldn't blame someone who did.
thorwasdfasdf 6y ago
just to play devil's advocate: this day and age, is there anything better they could've invested in? Equities PE ratio is at all time highes and it's getting ever harder for early stage start ups to succeed. There's more and more monopolies and fewer and fewer startups able to succeed. But, there's a ton of money out there sloshing around looking for returns. I think it's just a case of too much capital chasing too few opportunities. Until, we as a society start creating the necessary conditions for more opportunities to create actual wealth, we're going to keep seeing these types of low yield investments.
- Barrin92 6y ago
  >just to play devil's advocate: this day and age, is there anything better they could've invested in? I mean, biotech, clean energy, healthcare, pharmaceuticals or anything else that's risky but at least you have huge upside in case something succeeds? Or alternatively take the money to emergent markets and fund startups in Africa, at least there you have some huge potential for growth even if the products are boring.
Aperocky 6y ago
They made a $20 million investment on Alibaba in 1999, at that point they had 33%. Today they still hold 25%, which is worth about $150B. So really, you just need one success and 100 other loses doesn't matter that much. They can keep blowing money away until they find the next Alibaba. At this rate they can keep doing this for the lifetime of Masayoshi Son.

You know, i would say no. I would actually like to thank softbank for taking the risks that it did, as it should be a very interesting business study to look at what, and how, they did what they did. They made collosal mistakes/mis-judgements, sure - but look at how much can be learned from what they have done. I would like to know even more about all the details of what they have done. I would like to see if i could learn - even for just the acedemic aspect of it - all the mistakes they made, their reasonings behind what decisions they made etc. Its a fascinating study, if you think about it. Look at the companies we are talking about they failed upon; uber, we-work and oyo are mentioned just in this HN thread. All of which are “household names” to silicon valley. Recall the articles about how OYO was “revolutionizing what we thought of hotels.... Man, that guy/company got mad press praise. So, i want to learn as much as i can about everything softbank did.

gruturo 6y ago

That, and the name of the fund ended up being hilariously wrong. They have invested in things where a 10 year old could have pointed out obvious fallacies. Saudi investors must be really pissed off, they look like complete fools now (having just been parted with quite a bit of their money). If I were Masayoshi Son, I wouldn't step in a Saudi embassy for all the money in the world now. Oh well if they blow up it's actually capitalism working right for once. Too bad they own ARM, that's more or less the only thing of value that could be lost imho.

disgruntledphd2 6y ago
ARM will just get sold to someone else. They own a bunch of Alibaba too, to be fair.
- Traster 6y ago
  I find it very difficult to see where ARM fits, it really should be an independent company. Since everyone who sees the most value in buying it shouldn't be allowed to. Can you imagine if Apple snapped it up? Or Qualcomm? Or even Intel?
  - sah2ed 6y ago
    > Can you imagine if Apple snapped it up? Or Qualcomm? Or even Intel? Apple perhaps, but they tend to avoid generic M&A like this. They tend to only do M&A when there is a very strong fit; they’ll happily continue to license ARM’s IP. The others each have offerings that compete with ARM, so on that alone, they wouldn’t be able to close the sale unless regulators are completely asleep at the wheel.
    - jdmg94 6y ago
      There's heavy speculation of Apple ditching Intel for the ARM platform, it'd be interesting to see if it could actually happen. It has to be an opportunistic move
  - jdmg94 6y ago
    Apple has the deepest pockets in the list you gave there, and they have skin in the chip manufacturing business. Shit's about to get interesting.
  - microtherion 6y ago
    You may recall that ARM started out as a joint venture involving, among other companies… Apple! Apple got rid of their investment around the turn of the millenium, which in retrospect might not have been the most savvy investment strategy.
- puranjay 6y ago
  I would be worried about Alibaba as well given how the world has been building up momentum for a China-USA decoupling.
jrumbut 6y ago
Some very quick Googling came up with ominous signs of the tech bubble bursting (in 2011): https://www.nytimes.com/2011/06/20/technology/20cashout.html https://www.nytimes.com/2011/06/20/technology/20cashout.html “We are not sure that the valuations we are seeing are sustainable in the long term” Also 2015: https://www.inc.com/magazine/201509/jeff-bercovici/are-we-in-a-tech-bubble.html https://www.inc.com/magazine/201509/jeff-bercovici/are-we-in... "Private valuations have become disconnected from public reality" If you bought Amazon when it was valued at $50 billion, you would have (small) profits even if you bought 20 WeWorks at $50 billion as well. If you could bring it down to 10 WeWorks per Amazon you'd make enormous returns. Not sure I'd want to hand over my non-existent fortune to Masayoshi Son, but I wouldn't blame someone who did.

thorwasdfasdf 6y ago

just to play devil's advocate: this day and age, is there anything better they could've invested in? Equities PE ratio is at all time highes and it's getting ever harder for early stage start ups to succeed. There's more and more monopolies and fewer and fewer startups able to succeed. But, there's a ton of money out there sloshing around looking for returns. I think it's just a case of too much capital chasing too few opportunities. Until, we as a society start creating the necessary conditions for more opportunities to create actual wealth, we're going to keep seeing these types of low yield investments.

Barrin92 6y ago
>just to play devil's advocate: this day and age, is there anything better they could've invested in? I mean, biotech, clean energy, healthcare, pharmaceuticals or anything else that's risky but at least you have huge upside in case something succeeds? Or alternatively take the money to emergent markets and fund startups in Africa, at least there you have some huge potential for growth even if the products are boring.

Aperocky 6y ago

They made a $20 million investment on Alibaba in 1999, at that point they had 33%. Today they still hold 25%, which is worth about $150B. So really, you just need one success and 100 other loses doesn't matter that much. They can keep blowing money away until they find the next Alibaba. At this rate they can keep doing this for the lifetime of Masayoshi Son.