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Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

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Re: Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

#21

Post by dragonwriter »

oooglaaa wrote: post #13
pterhx wrote: post #10

Earlier quoted context omitted.

I don't know if $45B is a line item to them, but to give you a sense of scale of how much money the Saudis have, Aramco had a net income of about $34B in the first half of 2017 [0]. [0] https://www.bloomberg.com/gadfly/articles/2018-04-13/saudi-a...

That’s insane. That’s more than Apple, Amazon, and Alphabet’s 2017 net income combined . How does a commodity business (oil and gas) generate so much profit?

> How does a commodity business (oil and gas) generate so much profit?

OPEC.

Re: Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

#23

Post by oooglaaa »

sidko wrote: post #20
oooglaaa wrote: post #13

Earlier quoted context omitted.

That’s insane. That’s more than Apple, Amazon, and Alphabet’s 2017 net income combined . How does a commodity business (oil and gas) generate so much profit?

>That’s insane. That’s more than Apple, Amazon, and Alphabet’s 2017 net income combined. That's not insane, that's false. Just Apple's 2017 net income was $48.35B [1], more than the $45B in the parent comment. [1] https://investor.apple.com/investor-relations/sec-filings/se...

The parent comment figure was for the first half of the year. In other words, Aramco had a net income of $34B in just six months of business.

Re: Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

#24

Post by wp381640 »

pterhx wrote: post #10
oooglaaa wrote: post #7

Saudi Arabia invested 45% of the 100B. It’s rare for a state to make such risky investments. Either they have a lot of available capital, and the 45B is nothing but a line item, or they’re trying to dig themselves out of a hole and they need to take on big, risky investments to do that.

I don't know if $45B is a line item to them, but to give you a sense of scale of how much money the Saudis have, Aramco had a net income of about $34B in the first half of 2017 [0]. [0] https://www.bloomberg.com/gadfly/articles/2018-04-13/saudi-a...

$34B is a lot in company scales but not a lot when it is the vast majority of a government budget used to sustain a very plush lifestyle for millions of people.

Saudi has been running huge deficits and have had to dig into their reserves to the tune of hundreds of billions of dollars to sustain their spending.

In the first five months of '15 they had to draw $65B from reserves just to meet costs[0]

They've introduced a new VAT, excise on fuel, cut health and education spending etc. to prevent the house of cards from collapsing[1].

[0] https://financialtribune.com/articles/world-economy/20960/sa...

[1] https://www.economist.com/middle-east-and-africa/2018/01/13/...

Re: Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

#25

Post by deafcalculus »

Animats wrote: post #2

It has already committed $65 billion to acquire big stakes in Uber, WeWork, Slack, and GM Cruise. Uber and WeWork[1] are money drains buying market share. GM Cruise is a "fake it til you make it" operation. Is Softbank the biggest dumb money operation of all time? (WeWork is strange. Most real estate businesses buy property and rent it out. WeWork rents property long term and rents it out short term.) [1] https://new…

Maybe Softbank wants to sell it to a bigger fool? They invested in Flipkart, a competitor of Amazon, and then sold it to Walmart. But I gotta admit, they'll need to find extraordinarily dumb money to buy their stake in Uber.

Re: Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

#26

Post by nelsonic »

This is only going to fuel (accelerate) the tech bubble helping already bloated unicorns burn more cash.

Masayoshi is unquestionably a smart guy, but he's making some pretty big bets on an uncertain future.

Uber has raised $22.2B so far and made a $891M Net Loss in its second quarter ending June 30. It's difficult for a mere mortal to see how Uber will ever be profitable considering the cumulative losses.

Re: Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

#27

Post by [deleted] »

nelsonic wrote: post #26

This is only going to fuel ( accelerate ) the tech bubble helping already bloated unicorns burn more cash. Masayoshi is unquestionably a smart guy, but he's making some pretty big bets on an uncertain future. Uber has raised $22.2B so far and made a $891M Net Loss in its second quarter ending June 30. It's difficult for a mere mortal to see how Uber will ever be profitable considering the cumulative losses.

[deleted]

Re: Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

#28

Post by sumedh »

deafcalculus wrote: post #25
Animats wrote: post #2

It has already committed $65 billion to acquire big stakes in Uber, WeWork, Slack, and GM Cruise. Uber and WeWork[1] are money drains buying market share. GM Cruise is a "fake it til you make it" operation. Is Softbank the biggest dumb money operation of all time? (WeWork is strange. Most real estate businesses buy property and rent it out. WeWork rents property long term and rents it out short term.) [1] https://new…

Maybe Softbank wants to sell it to a bigger fool? They invested in Flipkart, a competitor of Amazon, and then sold it to Walmart. But I gotta admit, they'll need to find extraordinarily dumb money to buy their stake in Uber.

> Maybe Softbank wants to sell it to a bigger fool?

How is Walmart a bigger fool incase of flipkart, they wanted to gain an entry into Indian ecom and prevent Amazon to capture the entire market.

Re: Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

#29

Post by lotsofpulp »

cookingrobot wrote: post #18
oooglaaa wrote: post #13

Earlier quoted context omitted.

That’s insane. That’s more than Apple, Amazon, and Alphabet’s 2017 net income combined . How does a commodity business (oil and gas) generate so much profit?

Unlike (almost) every other business on earth where you have to do work and compete with peers to make a profit on your efforts, all the value of oil is sitting in the ground underneath them. Oil wealth is just luck of being born on top of the right geology.

And being part of an extremist tribe who were useful to the Brits/Americans versus the Ottomans in World War 1, who then continued to provide a “stable source” of oil. Stable because they stamped out any sort of democracy or society with freedoms that would allow anyone to object to their arrangements with the West, in exchange for one family of the tribe to become extremely wealthy.

Re: Masayoshi Son, SoftBank, and the $100B Blitz on Sand Hill Road

#30

Post by deafcalculus »

sumedh wrote: post #28
deafcalculus wrote: post #25

Earlier quoted context omitted.

Maybe Softbank wants to sell it to a bigger fool? They invested in Flipkart, a competitor of Amazon, and then sold it to Walmart. But I gotta admit, they'll need to find extraordinarily dumb money to buy their stake in Uber.

> Maybe Softbank wants to sell it to a bigger fool? How is Walmart a bigger fool incase of flipkart, they wanted to gain an entry into Indian ecom and prevent Amazon to capture the entire market.

Walmart could've started out on their own. They wouldn't have been far behind because e-commerce is still new in India. But no, they spent billions buying a glorified smartphone shop that people will desert the moment they stop offering deep discounts.
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