It’s almost as if SPACs were designed just for Son, better known as Masa. After all, there’s a reason they’re colloquially called blank-check companies. As founder and chairman of SoftBank Group, he has overseen more acquisitions, by value, than almost any other person on the planet.(1)
Masa’s early investments included Yahoo Inc. and what’s now known as Alibaba Group Holding Ltd. He has since gone on to buy telecom operators at home and abroad, as well as globally famous chip companies, before his $100 billion Vision Fund upped the ante to stakes never before seen. Holdings of WeWork parent We Co., Uber Technologies Inc., ByteDance Ltd. and Grab Holdings Inc. are among his latest purchases.
But that shopping spree has slowed to a crawl this year. A global pandemic and resultant economic slowdown stand as a smokescreen to what was already likely to happen: a reduction in investments, a fresh round of fundraising, and attempts to boost the share price through buybacks. Keep in mind that WeWork had already imploded and Uber shares were below their IPO price before anyone had heard of Covid-19.
The idea of raising a second fund through private investors doesn’t look promising, while in May I floated the idea of the original Vision Fund listing. I still think that’s an option worth considering, yet taking a new fund straight to public markets seems like the perfect strategy for Masa and Misra to get the cash they need.
It’s a big opportunity for brave investors, too. Thus far, those who buy into Masa’s vision are limited to shares in SoftBank Group, which includes its Japanese telco and Alibaba stakes, and are punished with a massive conglomerate discount. With a SPAC, they’ll be able to trade on his investment-picking prowess alone.
Traditionally, SPACs raise money before even nominating a private target to purchase. I suspect these two already know which company they’re interested in, and may decide to make more than one purchase. Debt raising is likely to be involved too, because Masa just loves leverage.
SPACs may well be a 2007 fad that we didn’t need revived, but investors should expect Masa to put his own unique spin on a tired cliche.
(1) Yes, I have heard of Warren Buffett, hence “almost.”
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.
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