Just hours ahead of Uber Technologies Inc’s market debut, the ride-hailing company’s biggest shareholder, Masayoshi Son’s Softbank Group Corp, is already reaping rewards, if only on paper.
Softbank’s operating income more than tripled to ¥494.9 billion (US$4.5 billion) in the three months to March 31, helped by a ¥418 billion valuation gain from its stake in the ride-hailing giant, the Tokyo-based company reported yesterday.
Uber is to go public today in an offering that might give the company a market value of about US$80 billion.
Softbank announced a two-for-one stock split along with the strong earnings, while it keeps the same dividend payout per share. That would effectively double the annual dividend year-on-year.
Softbank holds stakes in all of the world’s biggest ride-hailing companies and a successful initial public offering for Uber could signal more payoffs down the road. Son’s investors might also reap a windfall from the planned listing of Slack Technologies Inc later this year.
Son’s US$100 billion Vision Fund and Softbank’s own Delta Fund contributed ¥1.26 trillion to profit in the fiscal year ended March 31, or slightly more than half of the total.
Investments in 29 companies showed an increase in fair value, while 12 reported a decline.
In addition to Uber, Softbank also booked a ¥203.4 billion valuation gain from its stake in Guardant Health Inc, which went public in October, and a ¥154.2 billion gain in India’s Oyo. It also recorded a ¥222.6 billion loss due to the share price decline in Nvidia Corp.
The Vision Fund holds 69 investments at a cost totaling US$60.1 billion, with ride-hailing as the single biggest segment.
In addition to Uber, Softbank has poured more than US$10 billion into China’s Didi Chuxing (滴滴出行), US$3 billion into Southeast Asia’s leading provider Grab and US$2.25 billion in General Motors Co’s self-driving unit Cruise.
Son has said that put together, Vision Fund’s portfolio companies control 90 percent of the ride-hailing market worldwide.
Softbank also invested in Slack in September 2017 in a financing round that valued the seller of chat and collaboration tools to businesses at US$5.1 billion.
The San Francisco-based company could now be worth more than triple that, at US$16 billion, with it to go public next month or in July.
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