What’s going on?

• SoftBank – a Japanese conglomerate, reported better-than-expected earnings after its investment in DoorDash really delivered.

What does that mean?

• Both the global rally in tech stocks and the booming demand for IPOs has led to SoftBank’s doing well in private investments, leading to a record profit for its Vision Fund – the world’s biggest tech-focused VC fund.
• Two of its holdings did especially well: Uber and DoorDash – the latter made a barn-storming IPO in December.
• This was such a big deal to investors, not only did this record profit follow a WeWork-shaped record loss in 2019, it also offset the losses the company suffered from other investments in Q4/2020 – namely listed tech stocks and options.

Why should I care?

For markets: Bright 2021 ahead for Softbank

• SoftBank’s Vision Fund makes money by buying stakes in private companies and selling those stakes on to public investors via an IPO.
• Therefore, with (1) Vision Fund’s 6 more companies planning to go IPO in 2021, and (2) no sign of demand for IPOs slowing down, SoftBank might be growing even better.

The bigger picture: Japan’s stocks on the rise

• Japan’s stocks are up more than 6% this year (outperforming the US and the global stock markets) and hitting their highest level in 30 years,  and there’s still a lot further to rise (at 30% below their all-time highs).
• That might be why analysts are recommending Japan’s stocks over America and South Korea’s (both of which have hit record highs in the last few months).

Content source: Finimize (2021) Dishing For Compliments. Available at: https://www.finimize.com/wp/news/dishing-for-compliments/ [Accessed on February 10, 2021]