61–70 of 90 posts
I always thought IoT was a stupid idea. From day 1 it sounded pointless and unprofitable.
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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.
I'm still skeptical that anyone will win that space. The core problem (instant delivery logistics in a dense urban area) is just too expensive for the average consumer to bear. Right now every player is VC subsidized, but what happens when that money dries up?
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Correct. Here "backfired" is the investment did not make 10x return
Well, 10x was never a target, they were happy with 2x return from Nvidia acquisition.
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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.
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.
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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.
How it 'backfired', if it is going to do an IPO? Post IPO its market value could be much higher than acquisition price of $31B. Failure to sell to Nvidia at 2X the acquisition price is not a failure, it was an honest attempt to make a profit.
Analysts do not expect ARM to IPO at over $32B ( https://www.reuters.com/markets/asia/arm-ipo-marks-sober-end... ). That is why Softbank agreed to the acquisition offer in the first place, otherwise they would have just gone for an IPO directly.
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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.
This is correct: an uncorrected return stream that underperforms market beta is often still highly desirable / sought after.
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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.architectur…
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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.
This is still underperforming the sp500 who went up 87% in the same 5 years.
Now, let’s look at next 5 years. Would you be willing to bet that sp500 continues its streak? Would all macro-economic coincidences and government actions continue in same manner for next 5 years?