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A 2020 shopping list Masayoshi Son: K-pop band, Aramco for investor?

A list of investments Masayoshi Son ought to consider after after an awry year for SoftBank Vision Fund.

Tim Culpan | Bloomberg Opinion 

Masayoshi Son
SoftBank founder and CEO Masayoshi Son

It was an year for and his SoftBank Vision Fund. One in which WeWorked out just how much attention he could Grab by saying Ola to lots of cash while actually being quite Slack on stuff that matters, like corporate governance and profits. Critics Wagged their fingers at the improbable bets, even when he tried to make lemonade from the year’s biggest failure.

The numbers are so bad, you have to laugh. Uber: down 37% since IPO. WeWork: valuation cut by 80%. Wag: sold back to founders at a loss. But Son will bounce back. He has to, because he has another Vision Fund to raise and run. Instead of being cowed into humility, it’s more likely he’ll double down and make even more fantastical bets with other people’s money. To help him out, I did a multivariate* analysis based on past SoftBank deals to come up with a list of investments he ought to consider.

A K-pop band

For all the preppy tunes and perfect cheekbones, Korean Pop bands are really just assets. Money is poured in, data are crunched, and if the algorithm works as planned, money comes back out. There’s buzz and superficial sheen, pure investment-bait for Son. Of course, this is an industry with a dark side. Suicides, assaults, and allegations of prostitution remind us that these impossibly beautiful super idols are vulnerable humans who have “a highly controlled relationship with fans,” as Matthew Campbell and Soohee Kim wrote in Bloomberg Businessweek. Scandal has never kept Son away, though, and given his enthusiasm for AI (a fancy word for number-crunching), a K-Pop band would hit the right note.

Air

Yeah. Really. If a French company can bottle water from a little town on the shores of Lake Geneva (called Evian-les-Bains), then Son could certainly can air from the Himalayas or the Antarctic. More recent thirst-quenching fads have ranged from from La Croix to hydrogen water. So it makes sense that something as bizarre as canned air would make it into the SoftBank portfolio. That stuff would be flying off shelves in Australia or India recently if marketed according to spiking pollution levels. There’s an app? Masa can invest in that, too.

Saudi Aramco

To be frank, Saudi Arabia’s state oil company isn’t really the kind of thing SoftBank should be putting money into because oil is just not futuristic enough. Data is said to be the new oil anyway. But then, taking Saudi money is something many believe Son shouldn’t be doing at all in light of the murder of writer Jamal Khashoggi. Son has pledged not to abandon the Saudis—after all, they gave $45 billion to the Vision Fund—and so that commitment may as well include throwing support behind Crown Prince Mohammed bin Salman and his nation’s largest asset. Riyadh ended up settling for a $1.7 trillion market cap at IPO, after previously assuring everyone that it was worth at least $2 trillion. While it hit that figure within days of listing, the shortfall at IPO is equivalent to three Vision Funds. After WeWork’s $40 billion drop in value, Masa will feel right at home.

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A country

No idea which country, but there are certainly some around that seem up for sale. Just ask China and Taiwan, which have been buying loyalty for decades (the Solomon Islands being the latest transaction). And let’s not forget that U.S. President Donald Trump, whom Son met just a month after the 2016 election, has floated the idea of buying Greenland (which is a self-ruled territory of Denmark). The Danes described the notion as absurd, making it right up Son’s alley. Heck, he could even set up an air-canning plant on the North Atlantic island. But Son needn’t simply acquire a nation. He would rebrand it as his own, replete with passports and a flag. From there, virtual citizenship and a utopian paradise are just a step away. Masastan could be a combination of Cayman Islands and Switzerland, offering anonymity, privacy, and a tax shelter — the perfect place for the newly minted billionaires he’s helped create to park their assets. Sure, founding your own nation isn’t easy, but Son isn’t one to be swayed by practical realities.

Tesla

A dreamy idea. A cult-like status among investors and customers. A megalomaniac for a leader who eschews authority. And chronic losses. It’s got SoftBank written all over it. Rather than tackle big egos, Son has a history of enabling them — “We created a monster,” he’s reported as saying of WeWork founder Adam Neumann. With the SEC and cave-diving heroes trying to cut Elon Musk down to size, Son (and his cash) would be just the kind of cheerleader that the 420-guy needs.

*This analysis, like WeWork's Community-adjusted EBITDA metric, isn't real. The writer made it up.

First Published: Tue, December 31 2019. 07:25 IST
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