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How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

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Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#51

Post by zippy5 »

hartator wrote: post #37
paxys wrote: post #34

Earlier quoted context omitted.

It's not as simple a comparison. We don't know the annual return % since all the money wasn't invested on day 1 but at various different points over 5 years. And the majority of it is still tied up in companies that haven't exited yet, so the value is mostly theoretical.

Sp500 is meant to be the benchmark. This is very unfair to present worst numbers than the benchmark and present it as a win even if numbers can be off.

I mean, 90% of large cap investors have underperformed the sp500. It's not about optimal returns, it's about diversification and portfolio risk. The Saudi's want some of their money in things that aren't correlated with oil, and pretty much everything in the physical word is. Technology is one of the few things that may even be inversely correlated.

https://www.cnbc.com/2020/09/18/stock-picking-has-a-terrible...

Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#52

Post by karmasimida »

paxys wrote: post #21
dannykwells wrote: post #6

Can anyone tell me an example where Softbank has been spectacularly correct in the past few years? We all know the failures - are there any major success in their portfolio? Or is it all meh?

https://visionfund.com/portfolio ByteDance, Grab, Ola, Uber, Opendoor, Slack, DoorDash, Didi, Coupang were/are all great bets. According to CrunchBase ( https://news.crunchbase.com/news/softbank-vision-fund-strate... ), as of March 31, 2021 Vision Fund 1 was worth $146.5 billion from $86.2 billion in initial investment. I don't know enough about the space to judge whether that is considered good enough or not.

For growth stock ... doesn't seem very impressive.

But consider how big they are, probably not too bad?

Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#53

Post by threshold »

perfopt wrote: post #29
threshold wrote: post #16

I always thought IoT was a stupid idea. From day 1 it sounded pointless and unprofitable.

It is not a stupid idea. Most companies cannot make too much money from designing/selling the hardware. On the other hand there is money to be made from the data collected from these IoTs and selling device management and updates as a service. ARM is just not the right company to make that happen. They are fantastic at what they do but not software services, big data, etc

Do we really want every household item squirreling information back to the manufacturer about our personal habits? Exactly who stands to benefit from that? Consumers will lose a fortune and shun the technology.

Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#54

Post by ashtonkem »

zippy5 wrote: post #51
hartator wrote: post #37

Earlier quoted context omitted.

Sp500 is meant to be the benchmark. This is very unfair to present worst numbers than the benchmark and present it as a win even if numbers can be off.

I mean, 90% of large cap investors have underperformed the sp500. It's not about optimal returns, it's about diversification and portfolio risk. The Saudi's want some of their money in things that aren't correlated with oil, and pretty much everything in the physical word is. Technology is one of the few things that may even be inversely correlated. https://www.cnbc.com/2020/09/18/stock-picking-has-a-terrible...

That's assuming that the Saudis are being rational with their money. Given that they are currently trying to build a city that's a straight line[0], and a "shape based" floating octagon city[1], that assumption might not be correct. It's entirely likely that the real answer has less to do with Softbank's performance and their need to diversify, and more to do with MBS liking Masayoshi Son.

0 - https://www.architecturaldigest.com/story/saudi-arabia-build...

1 - https://markets.businessinsider.com/news/stocks/saudi-arabia...

Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#55

Post by ashtonkem »

threshold wrote: post #16

I always thought IoT was a stupid idea. From day 1 it sounded pointless and unprofitable.

It's a great idea ... for industrial processes and machines. Unfortunately this is not where the hype is, nor where continual profits are. Industrial customers have a nasty habit (from the seller's perspective) of buying stable stuff that they can run for decades, which tends to rule out planned obsolescence based profits.

Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#56

Post by sschueller »

threshold wrote: post #16

I always thought IoT was a stupid idea. From day 1 it sounded pointless and unprofitable.

You can do IoT correct and you can do it wrong. Most decide that you need to pull out your phone or register a device before you can use it. No one wants to download and app to be able to operate a juicer. However a coffee machine for example could be extended with optional features not hindering the core functionality.

Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#57

Post by bogota »

devmunchies wrote: post #18
bogota wrote: post #14

Earlier quoted context omitted.

Really? You think gopuff is going to win that space? Why?

The “This Week in Startups” podcast from last week, episode 1378, interviewed the CEO. They are hiring their own drivers and building their own delivery hubs, meaning products you order are coming from their hubs, not from CVS or Walmart. They have more control over efficiency. They even acquired BevMo and are converting those into hubs.

How do they scale demand for peak times with a fixed workforce? It seems trivially easy for say Uber to start hubs if they wanted to and they have a huge existing base.

But it comes down to execution and it will be interesting to see the space in another 5 years.

Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#58

Post by detaro »

perfopt wrote: post #29
threshold wrote: post #16

I always thought IoT was a stupid idea. From day 1 it sounded pointless and unprofitable.

It is not a stupid idea. Most companies cannot make too much money from designing/selling the hardware. On the other hand there is money to be made from the data collected from these IoTs and selling device management and updates as a service. ARM is just not the right company to make that happen. They are fantastic at what they do but not software services, big data, etc

If it only has benefits for the maker, it sounds pretty stupid...

Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#59

Post by cerved »

FanaHOVA wrote: post #48
hartator wrote: post #45

Earlier quoted context omitted.

sp500 has both better returns and better diversification so less overall risks. And I am sure Vision Fund has higher expenses ratio than most of sp500 indexes. The only ones winning here is the execs of the fund.

You aren't understanding how capital and risk allocation work at a portfolio level. The people putting money in the SoftBank funds ALREADY have hundreds of billions invested in public equities. They are looking to diversify their portfolio across different asset classes. Your comment isn't relevant.

maybe it's just me but the tone of this comment reads unnecessarily hostile

Re: How SoftBank’s costly bet on the ‘internet of things’ backfired at Arm

#60

Post by Tanjreeve »

fastball wrote: post #15
dannykwells wrote: post #6

Can anyone tell me an example where Softbank has been spectacularly correct in the past few years? We all know the failures - are there any major success in their portfolio? Or is it all meh?

Basically they won big with Alibaba and everything else is... not great.

So probably about the same as most VC companies.
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