19 November 2022

Smells Like the DotCom Crash

Softbank CEO Masayoshi Son appears to be personally on the hook to the tune of almost $5 billion to the company that he runs, because of recent setbacks with the company's investments.

Son borrowed money from Softbank to make personal investments in the funds, and he's lost that money.

I really hope that he gets taken to the cleaners:

Masayoshi Son personally owes SoftBank close to $5bn because of growing losses on the Japanese conglomerate’s technology bets, which have also rendered the value of his stake in the group’s second Vision Fund worthless.

The billionaire’s ballooning personal liabilities, discovered through a Financial Times analysis of SoftBank’s recent filings, comes as the world’s biggest tech investor was hammered by plunging tech stocks and valuations in private companies over the past year.


The total amount the Japanese executive owes his company is now at $4.7bn, when losses in the group’s shortlived internal hedge fund SB Northstar are also taken into account, SoftBank confirmed to the FT.


Son has to personally cover a third of the losses in Northstar, which earned notoriety for carrying out the “Nasdaq whale” trades in US technology stocks in 2020. The stock-trading unit’s total investment losses grew to nearly $6bn at the end of September as the group continued to liquidate its investments.

If the internal hedge fund’s outsized derivative bets had paid off, Son would have reaped a third of the gains.

Similarly, if Vision Fund 2’s investments in private technology companies had been profitable, the SoftBank founder stood to gain handsomely without putting up any upfront capital. Instead the arrangement has wiped billions of dollars off the net worth of one of Japan’s richest men.

I'm not a finance guy, and I know nothing of the laws regarding financial impropriety in Japan, but it stuns me that this sort of wheeling and dealing is legal.

It should not be.  This is the very epitome of parasitic finance.


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