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SoftBank Pours Billions Into Big Tech, Amasses $1.2 Billion in Amazon Shares

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Key Points

  • SoftBank Group is on another investment spree—but this time it buys into America’s Big Tech establishment instead of chasing highly valued startups in a bid to appease investors with immediate returns.
  • The Japanese conglomerate’s new filings Monday show it had built up a $1 billion stake in Amazon as of June 30.
  • Other new holdings included shares in Google’s parent Alphabet worth $500 million, as well as Tesla and Netflix worth $200 million each. Because share prices in these firms have since risen, the Amazon stake alone is now worth $1.2 billion.
  • Visit The Financial Today’s homepage for more stories.

SoftBank Group is on another investment spree—but this time it buys into America’s Big Tech establishment instead of chasing highly valued startups in a bid to appease investors with immediate returns.

The Japanese conglomerate’s new filings Monday show it had built up a $1 billion stake in Amazon as of June 30. Other new holdings included shares in Google’s parent Alphabet worth $500 million, as well as Tesla and Netflix worth $200 million each. Because share prices in these firms have since risen, the Amazon stake alone is now worth $1.2 billion.

The filings, which SoftBank submitted this month to report activities in the April-June period, are required every quarter by the U.S. Securities and Exchange Commission. This marks the first time SoftBank has made such a filing.

During last week’s earnings call, SoftBank Chairman and CEO Masayoshi Son announced the launch of a subsidiary to invest $555 million in publicly listed stock using excess cash from recent large sales of assets, including Alibaba Group Holding shares.

The move to buy into large, public-tech firms marks a shift in the Japanese investment powerhouse ‘s priorities as it struggles with investment pressure to improve its balance sheet.

SoftBank is known most around the world for its venture capital arm the Vision Fund, which backs private startups according to Son’s 300-year plan.

But its aggressive strategy, along with the formation of a second Vision Fund, has been called into question especially after its perceived reckless bet in WeWork. The coronavirus pandemic has added to the company’s financial woes.

Speaking of its new investment management subsidiary last week, Son said, “Amazon, Apple, Facebook, so these are the names generally recognized widely by many people. These are highly liquid names that we can sell quite easily in the market.”

“In addition to that, in order to minimize the risk, we use derivative transactions as well,” he said. “And against the volatility in the market, we hope to hedge the risk.”

Already, the new holdings in large U.S. public companies seem to be paying off.

SoftBank’s position in Amazon, as disclosed in the Monday filing, would have reaped a $200 million gain in just six weeks, while its stake in Tesla would have gained $80 million, or 65%.

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