Kenneth Cheung/iStock Unreleased via Getty Images SoftBank Group Corp. ( SFTBY ), newly crowned “Japan’s most valuable company,” is a holding company with a portfolio comprising Arm Holdings ( ARM ) (40%), OpenAI ( OPENAI ) (25%), its telco arm Softbank Corp ( SOBKY ) (6%), and three major funds (Vision Fund 1, 2, and Latin America), among others. SoftBank For context, Softbank, under the leadersh...
Kenneth Cheung/iStock Unreleased via Getty Images SoftBank Group Corp. ( SFTBY ), newly crowned “Japan’s most valuable company,” is a holding company with a portfolio comprising Arm Holdings ( ARM ) (40%), OpenAI ( OPENAI ) (25%), its telco arm Softbank Corp ( SOBKY ) (6%), and three major funds (Vision Fund 1, 2, and Latin America), among others. SoftBank For context, Softbank, under the leadership of current Chairman/CEO Masayoshi Son, made its name off successful domestic telco forays and dotcom bets, most notably Alibaba ( BABA ), which remains one of the “greatest ever” investments. All this culminated in a track record that, through 2017, equated to an eye-popping +44% rate of return. SoftBank Since launching its two megafunds, Vision Fund 1 (2017) and Vision Fund 2 (2019), however, the group has been better known for high-profile wipeouts; for instance, Greensill (insolvent), Wirecard (fraud), WeWork (bankruptcy). A record $23bn quarterly loss in 2022, and CEO Masa Son's subsequent admission that “looking back at myself now, I am quite embarrassed and remorseful” only worsened Softbank’s perception within the investor community. SoftBank But, as I’ve highlighted in my prior coverage ( here and here ), every asset has a price. For Softbank, the key price gauge has always been its discount to net asset value (NAV) – an overly wide NAV discount, usually a signal of peaking pessimism, tends to be a great entry point. Today, the inverse is true, thanks to leveraged AI bets at the app level (OpenAI) and across the supply chain (Arm, SB Energy). Prima facie, a compressed NAV discount is a “take profit” signal. But there is also fundamental backing that shouldn't be ignored - Softbank is coming off an earnings report that saw the company post its “highest ever NAV,” as well as the “highest ever profit in Japanese corporate history” for fiscal year 2025. Given the push-pull, it’s as a good a time as any, in my view, to revisit the thesis. SoftBank A Record Year but AI...