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After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

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Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#121

Post by smabie »

perlgeek wrote: post #61
Traster wrote: post #8

The more I hear about this the more it looks like this entire scheme has turned into a pyramid scheme. Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms…

> I wonder what Masayoshi is doing these days. Trying to invest the rest of the Vision Fund v1, so that he can raise Vision Fund v2.

He’s already invested all of the 100bn for the first Vision Fund.

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#122

Post by sekasi »

zackmorris wrote: post #90

I'm deeply concerned about the direction that the tech world is going. I had hoped that early successes like eBay and PayPal would lead to democratization and egalitarianism, but sadly that's not the case. Where I had hoped to see something like a gig economy where anyone could jump in and out of work when they needed money, and multiple sources of ~$100,000 funding for startups, today I see a doubling down on race-t…

This is absolutely, unquestionably, spot on. It's a societal level change that's required to unpick what we have right now. It's incredibly complicated and there's issues everywhere.. but I think we can (mostly) agree that our current system doesn't benefit the many. And that can't be the way we want to be forever.

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#123

Post by wczekalski »

Traster wrote: post #8

The more I hear about this the more it looks like this entire scheme has turned into a pyramid scheme. Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms…

I really liked this video featuring Chamath Palihapitiya[1]. It's essentially a rant about most of VC being a ponzi scheme: https://www.youtube.com/watch?v=RwRZtZQoLtQ

[1] (from Wikipedia) Chamath Palihapitiya an is a venture capitalist and the founder and CEO of Social Capital. Palihapitiya was an early senior executive at Facebook, joining the company in 2007 and leaving in 2011. He is a minority stakeholder and board member of the Golden State Warriors.

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#124

Post by smabie »

onlyrealcuzzo wrote: post #65
t_mann wrote: post #25

"Yet it turned out that Agarwal [founder and CEO of a SoftBank-backed startup] had borrowed $2 billion to finance his share of the purchase" According to a recent article in the Economist, SoftBank encourages its own employees to do the same with SoftBank shares. There is a chance that things go well and they will look like geniusses (like Michael Dell who took his company private in 2013 and returned to markets last…

Dell looks like a great story because the market is up almost 100% since 2013. It's hard to say it was a good decision on Michael Dell's part. He could've bought anything else with leverage in 2013 and it probably would've turned out equally well or better. Dell isn't exactly doing amazingly.

So Dell took the company private in 2013 for 24.4bn. Right now the market cap is 34.26bn, most of the value from Dell’s 80% stake in VMWare (worth 65bn). So one it’s face, Dell looks pretty shitty. Since the buyout was announced (Feb 5, 2013), the S&P has returned around 105%. Dell as only returned 40%, mostly due to the massive amount of debt Dell has been loaded with.

Anyways I was hoping to make some argument about HP or Lenovo doing worse in that time period.. but after checking, Dell is indeed doing pretty shitty. Maybe I could make some weak argument about once they pay off their debt, but I dunno, he and his leveraged buyout guys could have done better with an index fund.

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#125

Post by samsonradu »

smabie wrote: post #121
perlgeek wrote: post #61

Earlier quoted context omitted.

> I wonder what Masayoshi is doing these days. Trying to invest the rest of the Vision Fund v1, so that he can raise Vision Fund v2.

He’s already invested all of the 100bn for the first Vision Fund.

I find it a bit funny that both comments say ‘invest’. Can we use that word to describe what actually looked like spending?

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#126

Post by bumblebee4 »

alexnewman wrote: post #2

Easy dumb money like SoftBank is the greatest enemy of innovation and progress. Just take a look at the first deck. Companies like Uber, Softbank, WeWork all having trouble with funding is an important step in our economy

Why? If it is easy to take it, let clever people take it to have the resources for real innovations.

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#127

Post by valleycynical »

Alex3917 wrote: post #48
Traster wrote: post #8

The more I hear about this the more it looks like this entire scheme has turned into a pyramid scheme. Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms…

> Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms to create paper gains that don't reflect reality. Is this uncommon? E.g. I don't have any inside info…

Same thing happened with Sam Altman and Loopt. A Sequoia VC who put money into Loopt pulled strings to get Green Dot to acquire it, allowing Altman and his supporters (chiefly PG) to claim it to be a success:

> https://news.ycombinator.com/item?id=3684357

Altman went on to become YC President, and has publicly toyed with the idea of running for Governor. Graham has even insinuated that Altman should be PotUS

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#128

Post by wolco »

somebodythere wrote: post #81
onlyrealcuzzo wrote: post #58

Earlier quoted context omitted.

Isn't SoftBank able to get negative yielding loans (essentially paid to borrow money) from the BoJ also? And doesn't the BoJ own a signficant portion of SoftBank stock? The Japanese economy sounds like a dystopian Capitalist hellhole to me. I'm hoping I'm just wrong about everything, and it's actually fine.

The BoJ owns 9.78% of Softbank. https://group.softbank/en/corp/irinfo/stock/ownership/ Softbank cannot borrow directly from the BoJ because it is not an actual bank. However, they recently issued bonds at a 1.38% rate: https://economictimes.indiatimes.com/markets/bonds/gone-in-1... Welcome to NIRP. Thankfully, Softbank's internal exposure to the Vision Fund is quite limited. Also, they have a sizeable liquid stake in…

That 100 billion Alibaba valuation looks fishy.

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#129

Post by Iv »

Traster wrote: post #8

The more I hear about this the more it looks like this entire scheme has turned into a pyramid scheme. Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms…

It is not a pyramid scheme, it is called a "pump and dump" scheme:

https://en.wikipedia.org/wiki/Pump_and_dump

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#130

Post by cinquemb »

Traster wrote: post #8

The more I hear about this the more it looks like this entire scheme has turned into a pyramid scheme. Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms…

>I wonder what Masayoshi is doing these days.

Smart Slumlord™ junk rated deals in preparation for its Softbank Fire Sale: "SoftBank will utilize its technology deployment insights to introduce advanced technologies to shopping malls and other commercial facilities, hospitals, and the entire Lippo Village area," Hidebumi Kitahara, SoftBank's vice president and head of global business strategy, said at a signing ceremony. "Through this, we aim to develop Lippo Village as a smart city model case in Southeast Asia."[0]

[0] https://asia.nikkei.com/Business/Business-deals/SoftBank-and...

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