What’s going on?
SoftBank (Japanese tech conglomerate) updated disappointing quarterly results, which was 40% lower yoy.
What does this mean?
- This shrink is partially due to the large stakes of Chinese companies that Softbank owns. The Chinese government has taken severe measures against local firms with US-listed shares
- This drags SoftBank’s stock down, which amplifies investors’ hoping for another share buyback program, as the current buyback program is coming to an end.
Why should I care?
For markets: Confusing sales of Tech investments
- SoftBank sold off most of its big US tech investments in Q1/2021, including $3.1b of Facebook, $1b of Microsoft, $575m of Alphabet, and $382m of Netflix shares, but still kept most of Amazon.
- This gives invertors pause for thought, even though it makes sense that SoftBank might have needed the cash to serve the buybacks when it has already borrowed a lot to fund new investments,
For you personally: “We are on a break”_Ross Geller
- While SoftBank is pausing its investments in Chinese startups until the regulatory situation becomes clearer, it remains positive on China’s prospects in the long run.
- That’s a friendly reminder that taking a long-term view doesn’t necessarily mean suffering through short-term hardship; sometimes, opting out for a while might let you enjoy the gain at a more opportune moment.
Content source: Finimize (2021) SmallBank. Available at: https://www.finimize.com/wp/news/smallbank/ [Accessed on Aug 12, 2021]
with HT 