A 6.5 per cent jump in the shares of SoftBank on Tuesday has a woeful subtext. The market worth of the Japanese group still trails the sum of its investments. That implies the dealmaking of tech evangelist Masayoshi Son is not an asset, but a liability. Earnings announced on Monday justified such caution.
The group reported year-on-year sales growth of 4 per cent. Operating income rose by nearly a half to ¥715bn ($6.4bn) largely based on “fair value” gains on investments.
But what are they worth in total? Tot up the market value of stakes in Alibaba and Yahoo Japan. Add estimates for the value of Arm, Sprint and the group’s domestic telecom business from brokerage CLSA. Deduct net debt of ¥13.8tn. That leaves you with ¥14.2tn ($130bn). Softbank’s market cap stands at ¥10.3tn. The discount of a quarter is troubling.