How does Sun Zhengyi contract the new economy companys blood transfusion

category:Finance
 How does Sun Zhengyi contract the new economy companys blood transfusion


SBG plans to sell about $12 billion to $15 billion worth of Alibaba shares as part of its $41 billion (4.5 trillion yen) asset realization plan announced the day before, it said on March 24.

The announcement of the sale of its most valuable shares during the market downturn shows that Softbank is eager to raise funds. But on March 24, the market also heard that Didi, the leader of Softbank, was driverless for $300 million. Is Softbank really short of money in one room? How can new economy companies get blood transfusions to survive when the money is tight?

Softbank plans to realize $41 billion of assets in the next year, which is undoubtedly a huge plan. The source said that Alibaba stock in its hands will become an important part of the huge plan.

Alibabas U.S. stock market is worth $473 billion, with a total equity of 2.683 billion shares. According to the prospectus released before the listing of Hong Kong shares in November last year, Softbank ranked the first largest shareholder with a shareholding ratio of 25.8%. That means Softbank has a market value of more than $120 billion in Alibaba shares. At present, 15 billion US dollars only accounts for 12.2% of Alibabas shares in Softbank.

This means that Softbank remains Alibabas largest shareholder after the sale. Even though Softbanks $41 billion financing plan is all from Alibabas stock realization, in terms of Alibabas current market value, it only accounts for 30% of Alibabas shares. In the prospectus disclosed by Alibaba last year, Ma Yun, the second largest shareholder, holds only 6.1% of the shares in the current period.

This is not the first time Softbank has sold Alibaba shares. This follows Softbanks announcement in June 2019 that it will complete the sale of 73 million shares of Alibabas American Depository stocks, and will earn about $11.12 billion in pre tax profits after the completion of the transaction.

Alibabas current share price has risen compared with the price range of $150-160 at that time. But the novel coronavirus pneumonia epidemic has been affecting the global stock market, which is not the high point of Alibaba stock price. As of March 23, U.S. shares closed at $176.34, down 2.74%. It is down about 23.5% from its closing price of $230.48 on January 13 this year.

The other worry of the market is whether a large number of Alibaba shares flowing into the market will lead to a sustained decline in Alibabas share price. On March 23, Alibabas share price dropped by more than 6% in the biggest way. Wang Jiyue, a senior investment banker, said to the reporter of China times that the selling of a large number of stocks would not be directly sold in the secondary market. It is often to find a buyer first, and then transfer them through bulk trading or agreement, so the pressure on the secondary market is less than expected. He believes that the pressure on confidence will be greater than the actual pressure. As of the press release, Alibaba has yet to respond to the sale of shares.

Strategic contraction

On March 24, Softbank group closed at 3791 yen, up 18.95%, compared with Alibabas decline. The increase broke Softbanks record 18.61% increase after it announced its cash plan on March 23.

The rest of the funds raised were announced to be used to reduce Softbanks liabilities and increase its cash flow. But Softbank said in a March 23 announcement that it now has more than $245 billion in assets and $15 billion in cash on its balance sheet. Sun said the $41 billion in assets to be realized is less than 20% of Softbanks current asset value.

But Softbanks share price has risen for two days in a row, falling about 28% from its closing price of 5239 yen on February 27 this year. After the announcement of the last buyback plan, on March 17, S & P lowered the credit rating outlook of Softbank from stable to negative, because the recently announced stock buyback plan and share price decline of Softbank pose risks to its financial health.

Ali is regarded as a textbook Level classic case in the history of Softbank investment. But in addition to Alibaba, in the listed or near listed investment enterprises, Softbank is also doomed to be cut leek. Ubers shares closed at $22.40 on March 23, more than 45% less than their peak of $41.86 in February. Uber went public for $45. In addition, Softbank valued Wework at $47 billion in February last year, but failed in its IPO in September last year. In December, Weworks valuation fell to $7.3 billion.

However, Wang Jiyue believes that Softbanks cash withdrawal is not due to lack of money due to investment. The current global economy is unstable, more strategic contraction.

But while Softbank is collecting a lot of money, on the other hand, there is news of outward investment. On March 24, industry sources said that Softbank group would take the lead in investing $300 million in didi auto driving company. However, as of the press release of China times, Didi has not yet responded to the reporters questions.

In fact, in addition to acquiring arm, the chip company, and becoming the largest shareholder of Uber, Softbank and its vision fund have been the gold masters of global new technology companies and new economy companies. According to the public information, in addition to investing in Oyo, an economic chain hotel in India, grab and other Southeast Asian travel platforms, Softbank has also invested in AI start-ups such as Shangtang technology and Malong technology in the Chinese market.

However, new technology and new economy companies are mostly in the stage of starting businesses and burning money, while the epidemic has increased their financial pressure. Some insiders told the reporter of China times that according to his knowledge, the financing of new economic enterprises is still going on, but the current financing has slowed down significantly and the overall funding is tight. As a large shareholder of many invested companies, Softbank, which initially gave high valuation, obviously had to bear the pressure of blood transfusion for survival for these start-ups.

According to public information, on March 18 this year Softbank invested another US $507 million in its Oyo hotel. This is undoubtedly a key saving money for Oyo, which is in the crisis of contract termination and layoff. But in recent days, Wework has accused Softbank of trying to break an agreement to buy $3 billion of shares in Wework. Prior to that, there were also reports that the IPO of Shangtang technology slowed down, and that it turned to seek to raise up to $1 billion in the private market. However, the head of Shangtang technology said to the reporter of China times that he would not comment on the market rumors. In addition, there is no plan for the specific time and place of listing of Shangtang. According to public information, Softbank has invested $1 billion in Shangtang technology. However, it needs to be mentioned that the asset realization cycle planned by Softbank is as long as one year. And the continuous spread of the epidemic accelerated the global capital market liquidity crunch. Under many uncertain factors, how will the new economic companies invested by Softbank survive this long winter? Source: Wang Xiaowu NF, editor in charge of Huaxia times

According to public information, on March 18 this year Softbank invested another US $507 million in its Oyo hotel. This is undoubtedly a key saving money for Oyo, which is in the crisis of contract termination and layoff. But in recent days, Wework has accused Softbank of trying to break an agreement to buy $3 billion of shares in Wework.

Prior to that, there were also reports that the IPO of Shangtang technology slowed down, and that it turned to seek to raise up to $1 billion in the private market. However, the head of Shangtang technology said to the reporter of China times that he would not comment on the market rumors. In addition, there is no plan for the specific time and place of listing of Shangtang. According to public information, Softbank has invested $1 billion in Shangtang technology.

However, it needs to be mentioned that the asset realization cycle planned by Softbank is as long as one year. And the continuous spread of the epidemic accelerated the global capital market liquidity crunch. Under many uncertain factors, how will the new economic companies invested by Softbank survive this long winter?