SoftBank Group unveils stock split, rakes in higher-than-expected profit on tech bets

Aided by the soaring valuations of its tech investments, SoftBank’s operating profit for the year jumped 80.5 percent to 2.4 trillion yen. Above, a Softbank advertisement in Tokyo. (AP Photo)
Updated 09 May 2019
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SoftBank Group unveils stock split, rakes in higher-than-expected profit on tech bets

  • The news comes at a time when SoftBank and its almost $100 billion Vision Fund stand at a possible inflection point with some of its big tech bets
  • The group is also considering listing the Saudi-backed Vision Fund, which has invested roughly $80 billion in around 80 tech firms

DUBAI: Japanese conglomerate SoftBank Group Corp. announced a stock split while keeping the per-share dividend unchanged for the year, effectively doubling its shareholder payout, as it also reported a better-than-expected annual profit.
The news comes at a time when SoftBank and its almost $100 billion Vision Fund stand at a possible inflection point with some of its big tech bets such as Uber Technologies heading to trading markets, in what investors and industry experts see as a test of SoftBank’s strategy.
The group is also considering listing the Saudi-backed Vision Fund, which has invested roughly $80 billion in around 80 tech firms, a source told Reuters last week.
A second Vision Fund will be announced soon, SoftBank Group founder and CEO Masayoshi Son said at a news conference on Thursday, adding it would be similar in size to the first fund with SoftBank likely to be the only investor initially.
The value of Vision Fund’s investments in 69 companies had risen to $72.3 billion by end-March, from their $60.1 billion acquisition cost, driven by gains at companies like Uber and Indian hotels startup OYO, SoftBank said on Thursday.
The fund’s stake in Uber, which debuts on Friday, grew 418 billion yen in value, while its share in OYO added 154 billion yen in value. Overall, the fair value rose for 29 firms and fell for 12 over the period, SoftBank said, with the rest unchanged.The value of its stake in Guardant Health, a Vision Fund portfolio company listed last year, grew 203 billion yen.
Aided by the soaring valuations of its tech investments, SoftBank Group’s operating profit for the year ended March jumped 80.5 percent to 2.4 trillion yen ($22 billion).
That was above a 2.1 trillion yen SmartEstimate that gives a greater weighting to top-rated analysts, Refinitiv data shows.
The tech and telecoms group said its common stock will be split at a two-for-one ratio on June 27, while its dividend will remain unchanged at 44 yen per share.
SoftBank’s transition away from telecoms toward tech investments accelerated with the 2.35 trillion yen listing of a third of its domestic telco SoftBank Corp. in December in what is Japan’s largest-ever initial public offering.
That provided the funds for a share buyback that has helped drive up SoftBank Group’s stock by nearly 60 percent this year. The shares closed up 0.7 percent ahead of the earnings.


White House to host meeting with tech executives on Huawei ban

Details of an easing of the Huawei ban have not yet been released. (Reuters)
Updated 39 sec ago
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White House to host meeting with tech executives on Huawei ban

  • Intel and Qualcomm declined to comment. Google, Micron, Microsoft and Broadcom did not immediately respond to requests for comment

WASHINGTON: White House economic adviser Larry Kudlow will host a meeting with semiconductor and software executives on Monday to discuss the US ban on sales to China’s Huawei Technologies, two sources briefed on the meeting said.
Treasury Secretary Steven Mnuchin will also attend the White House event, to which chipmakers Inteland Qualcomm have been invited, the people said.
A White House official confirmed the meeting would take place, noting that Google and Micron would attend, but said it had been called to discuss economic matters.
The subject of Huawei was expected “to come up but that it is not the reason why they are convening the meeting,” said the official, who spoke on condition of anonymity.
The future of US companies’ ties to Huawei, the world’s no. 1 maker of telecommunications equipment, remains uncertain after the Trump administration put the company on a blacklist in May, citing national security concerns.

HIGHLIGHTS

• Huawei is the world's number one maker of telecommunications equipment.

• US Treasury Secretary Steven Mnuchin will attend the White House event, to which chipmakers Intel and Qualcomm have been invited, the people said.

The move banned US companies from selling most US parts and components to it without special licenses. However President Donald Trump said last month American firms could resume sales, with an eye on reviving trade talks with Beijing. Several weeks after the announcement, details about what the new policy toward the company is are still not forthcoming.
Commerce Department Secretary Wilbur Ross has said licenses would be issued where there is no threat to national security. Reuters reported that the United States may approve licenses for companies to restart new sales in a matter of weeks.
One of the people briefed on Monday’s meeting said Broadcom was also invited to the White House event. Microsoft was also expected to receive an invitation, the person said.
Intel and Qualcomm declined to comment. Google, Micron, Microsoft and Broadcom did not immediately respond to requests for comment.