SoftBank’s Son wants investors to ‘feel the force’ of his $32 billion ARM gamble

TOKYO: SoftBank Corp founder Masayoshi Son, who created a $68 billion (₹4.55 lakh crore) tech investment behemoth from a $50,000 start-up, has divided investors

TOKYO: SoftBank Corp founder Masayoshi Son, who created a $68 billion (₹4.55 lakh crore) tech investment behemoth from a $50,000 start-up, has divided investors and analysts with his latest “crazy idea”, the $32billion (₹2.1 lakh crore) acquisition of chip designer ARM Holdings.

HT Image

Visionary, risky, or both, the deal announced on Monday caught them all on the hop.

But in the way it was struck and presented, they all recognised the signature style of the man whose chutzpah led to successes such as early investments in Yahoo! and Chinese e-commerce company Alibaba, which briefly made him Japan’s richest man.

Many investors had been hoping Son would use cash from recent asset sales to buy back shares or pay down its hefty debt, so Soft Bank’ s Tokyo shares were hit by a glut of sell orders on Tuesday morning, trading down almost 11%.“A fresh acquisition is not what the market wants from SoftBank,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.

“It’s Son’s style to keep expanding, but isn’t he stretching too much?” Akino added.

Investors fret the purchase of ARM, Japan’s largest ever outbound deal, may be too much for SoftBank, still in the throes of turning around US carrier Sprint and tackling a $112 billion debt mountain. Others take the longer view. “There is little synergy with SoftBank’s existing businesses, but it makes sense if we look at ARM’s future potential,” said Tomoaki Kawasaki, senior analyst at Iwai Cosmo Securities Co. “Son is prioritising investment for the future over shoring up the balance sheet. It’s very Son-like.”

Selling his ARM deal to investors and analysts in London on Monday, he quoted Yoda, the diminutive Star Wars Jedi Master, with an urging to “listen to the force”, and told them Jack Ma, founder of Alibaba, had called immediately to discuss a partnership.

Until last month, Son, known as “Masa”, had been on the way out. Instead, the 58-year-old abruptly scrapped retirement plans and said he would stay onto create “SoftBank 2.0” and work on “a few more crazy ideas”.

When presenting the ARM deal, he breezily dismissed his doubters.

“If the investors do not like it, they will sell,” he said. “I am the largest shareholder in Soft Bank; I share the same interest as the other shareholders.”