EDITOR'S NOTE
We've got Peter Eavis--my former Heard on the Street colleague (and an incredible photographer, by the way)--coming up on the show today to talk about the scrutiny on Softbank as people keep reeling from WeWork's "botched" IPO. He explores this in the NYT today.
Here's a killer quote from the piece, from analyst Craig Moffett in discussing Sprint, which was one of Softbank's first splashy U.S. acquisitions back in 2013, when they took a controlling stake: "There's a very solid argument that Sprint's equity is worthless if the [T. Mobile] merger doesn't go through." Yikes.
So there's Sprint, WeWork, Slack (down 40% from its June highs)...a litany of names piling up that don't exactly make Softbank's backing look spectacular right now. Investors have given Softbank founder Masayoshi Son tons of dough--Softbank is currently trying to raise over $100 billion for its second "Vision Fund"--on the back of his smashing success with Alibaba. As the Times points out, Mr. Son put in $20 million in 2000 for a stake now worth nearly $119 billion.
We'll have more on whether Softbank is to blame for pouring billions into start-ups that used the money to delay or avoid taking necessary steps towards being ready for the public markets--like making governance changes, or tightening expenses. Then again, they weren't a Peloton investor, and those shares were down another 8% at the lows today after having the second-worst IPO debut of any company raising over a billion dollars this year.
But speaking of Alibaba, the shares just tanked on a Bloomberg report that Trump officials "are discussing" ways to "limit U.S. investors' portfolio flows into China."
The options reportedly under consideration: de-listing Chinese companies from U.S. stock exchanges; and limiting U.S. government pension funds' exposure to the Chinese markets. Either one--or any other steps the administration may come up with--would be a huge deal, obviously.
The U.S. major indexes immediately gave up their morning gains and turned negative on the report.
Much, much more coming up at 1 p.m.! See you then...
Kelly
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Jumat, 27 September 2019
It's all Softbank's fault--and a China bombshell
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