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▼ Softbank Billionaire Son Trims Share Pledges After AI Rally
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Masayoshi Son reduced the SoftBank Group shares he’s pledged to lenders by $2.1 billion in recent months, lowering his collateral after bets on artificial intelligence propelled the latest comeback in his volatile technology fortune.
Son trimmed his committed shares by 19.4 million to around 154.2 million, according to a filing earlier this month. About 31% of Son’s holdings in the Tokyo-listed company are now pledged to banks, down from near 39% in March 2020, data compiled by Bloomberg show.
The bulk of Son’s $35.3 billion fortune derives from a stake of just over a third in SoftBank, the Tokyo-listed conglomerate he founded that oversees a global empire of investments from chipmakers to startup ventures. SoftBank shares surged almost 200% to peak at the end of October on the back of an AI frenzy.
Shares have given up some of the gains lately on fears of a bubble in the sector, but are still heading for the biggest yearly gain since 2013.
A Singapore-based investment firm ultimately controlled by Son now holds $1.1 billion of SoftBank stock, according to the same filing, a departure from the billionaire’s previous management of his shares via Japanese entities.
Son has historically used shares in the group he founded as collateral for loans with lenders including Mizuho Financial Group, Deutsche Bank and Julius Baer Group, and has frequently transferred shares among different entities he controls.
A spokesperson for SoftBank declined to comment.
Son has been aggressively expanding his bets, making bold investments in AI hardware companies like Nvidia, which he later offloaded, and Taiwan Semiconductor Manufacturing Co., briefly turning him into Japan’s richest person earlier this year.
When SoftBank’s stock was trading around ¥25,000 ($160.57) per share in October, Son probably took "advantage of the value the shares have reached to take them off the pledges,” said Amir Anvarzadeh, a market strategist at Asymmetric Advisors in Singapore.
"But since then, they have been coming under a lot of pressure,” said Anvarzadeh, who recommends clients to short the stock.
Singapore-based SAM Wealth Management Pte borrowed 10 million SoftBank shares, worth about $1.1 billion, from a Japan-based parent company that is also controlled by the billionaire, according to the Dec. 5 filing.
The filing doesn’t detail the rationale behind the stock loan agreement between the two entities, but the transaction is a reminder of the complex web of relationships that have long underpinned one of Japan’s largest and most volatile fortunes.
The Singapore wealth firm was incorporated in 2021 and is fully owned by Son Asset Management, a Japanese entity that holds a 1.9% stake in SoftBank.
Son’s Singapore investment entity is headquartered at the city’s Raffles Place financial district. To fund its operations, it has borrowed from banks, including facilities backed by an aircraft. It did not disclose further details.
"With SoftBank shares up so much this year, there could be an opportunity for him to renegotiate with banks on terms for collaterals on the money that he’s borrowed,” said Kirk Boodry, a Bloomberg Intelligence analyst in Hong Kong who’s covered the Japanese tech firm for more than fifteen years.
Son trimmed his committed shares by 19.4 million to around 154.2 million, according to a filing earlier this month. About 31% of Son’s holdings in the Tokyo-listed company are now pledged to banks, down from near 39% in March 2020, data compiled by Bloomberg show.
The bulk of Son’s $35.3 billion fortune derives from a stake of just over a third in SoftBank, the Tokyo-listed conglomerate he founded that oversees a global empire of investments from chipmakers to startup ventures. SoftBank shares surged almost 200% to peak at the end of October on the back of an AI frenzy.
Shares have given up some of the gains lately on fears of a bubble in the sector, but are still heading for the biggest yearly gain since 2013.
A Singapore-based investment firm ultimately controlled by Son now holds $1.1 billion of SoftBank stock, according to the same filing, a departure from the billionaire’s previous management of his shares via Japanese entities.
Son has historically used shares in the group he founded as collateral for loans with lenders including Mizuho Financial Group, Deutsche Bank and Julius Baer Group, and has frequently transferred shares among different entities he controls.
A spokesperson for SoftBank declined to comment.
Son has been aggressively expanding his bets, making bold investments in AI hardware companies like Nvidia, which he later offloaded, and Taiwan Semiconductor Manufacturing Co., briefly turning him into Japan’s richest person earlier this year.
When SoftBank’s stock was trading around ¥25,000 ($160.57) per share in October, Son probably took "advantage of the value the shares have reached to take them off the pledges,” said Amir Anvarzadeh, a market strategist at Asymmetric Advisors in Singapore.
"But since then, they have been coming under a lot of pressure,” said Anvarzadeh, who recommends clients to short the stock.
Singapore-based SAM Wealth Management Pte borrowed 10 million SoftBank shares, worth about $1.1 billion, from a Japan-based parent company that is also controlled by the billionaire, according to the Dec. 5 filing.
The filing doesn’t detail the rationale behind the stock loan agreement between the two entities, but the transaction is a reminder of the complex web of relationships that have long underpinned one of Japan’s largest and most volatile fortunes.
The Singapore wealth firm was incorporated in 2021 and is fully owned by Son Asset Management, a Japanese entity that holds a 1.9% stake in SoftBank.
Son’s Singapore investment entity is headquartered at the city’s Raffles Place financial district. To fund its operations, it has borrowed from banks, including facilities backed by an aircraft. It did not disclose further details.
"With SoftBank shares up so much this year, there could be an opportunity for him to renegotiate with banks on terms for collaterals on the money that he’s borrowed,” said Kirk Boodry, a Bloomberg Intelligence analyst in Hong Kong who’s covered the Japanese tech firm for more than fifteen years.
- 13/12 20:06
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