SoftBank, Having Sold ARM, Considers Delisting

Foreign Media Reviews SoftBank MBO
Masayoshi Son Dissatisfied with Undervalued Corporate Value
SoftBank Shifts Corporate Management Strategy

[Asia Economy Reporter Naju-seok] Japanese SoftBank is reportedly internally considering delisting. After going through a major asset sale process, including selling the UK semiconductor design company ARM to Nvidia, SoftBank intends to shift its management direction.

[Image source=Reuters Yonhap News]

On the 14th, multiple foreign media outlets including Bloomberg cited an internal SoftBank source, reporting that the company is considering pursuing a management buyout (MBO). It is known that SoftBank Chairman Masayoshi Son had been considering an MBO since 2015, and the ARM sale appears to have strengthened his intention to transition to a private company.

This policy is reportedly due to Chairman Son's dissatisfaction with SoftBank's corporate value being undervalued compared to its asset value. So far, SoftBank has sold large assets it held to reduce this gap, but the disparity has hardly diminished.

SoftBank officials mentioned that the company's investment strategy changed when it launched the Vision Fund worth $100 billion (approximately 118.59 trillion KRW) in 2016. Accordingly, SoftBank's nature gradually shifted from a corporation to more of an investor or asset manager. With $40 billion in cash secured from the ARM sale, there is speculation that Chairman Son will engage in tactical investments.

However, it is uncertain whether this policy will lead to changes at SoftBank. The company has recently faced criticism from shareholders regarding a series of investment decisions. A clear example is the criticism from investors after it was revealed that SoftBank bought and sold $4 billion each in major tech stocks and options related to Amazon, Microsoft (MS), Tesla, and Alphabet. SoftBank was even labeled the "Nasdaq whale" for driving rapid rises and falls in US tech stocks. Despite significant profits from these investments, shareholders have openly criticized SoftBank for showing hedge fund-like investment patterns rather than conservative investing.

Chairman Son reportedly expressed frustration after SoftBank's stock price plunged 7% following the disclosure of these investments.

Earlier, some media reported that SoftBank had considered delisting in March this year by partnering with activist shareholder Elliott Management and the Abu Dhabi sovereign wealth fund of the United Arab Emirates (UAE), but the plan was eventually scrapped.

Supporters of the MBO believe that if delisting occurs, criticism from minority shareholders regarding investment decisions could be significantly reduced.

Within SoftBank, there is reportedly considerable negative sentiment toward the MBO. Market observers also speculate that delisting would not be an easy decision considering SoftBank's longstanding relationships with major Japanese banks. Some media have noted that the value of listed companies in Japan carries social significance. For example, whether a company is listed plays an important role in the process of university graduates deciding their preferred employers.

This content was produced with the assistance of AI translation services.