TOKYO -- SoftBank Group CEO Masayoshi Son struck a positive note in an earnings briefing here Wednesday about U.S. fund Elliott Management's recently reported 3% stake in the Japanese technology investor, saying he welcomes "a variety of opinions."
"I met with them around 10 days to two weeks ago," the SoftBank founder said.
Japan's second-richest billionaire said he agrees with Elliott's call for more outside directors on SoftBank's board and that he looks to improve governance and transparency regarding the company's investments.
But he was less keen on the idea of selling down the stake in Chinese tech titan Alibaba Group Holding, which has underpinned SoftBank's valuation, to meet Elliott's demand for up to $20 billion in stock buybacks.
"I'm in no hurry," he said.
Excerpts from the briefing follow.
On Elliott's buyback proposal
Son: "We've done buybacks in the past when we've had the financial wherewithal. Our thinking on this is basically aligned with Elliott's."
"As for the amount and the timing, we'll pay attention to the overall balance, including our bond ratings, as we think about that."
"Investors, activist or otherwise, are important partners. There may be points we disagree on, but I welcome a variety of opinions. I'm very grateful to have such a prominent shareholder on board."
On the prospect of selling Alibaba shares
Son: "Every year for the past five years or so, people inside and outside the company have told me we should sell. In the end, Alibaba's value grew far beyond where it was when they said that. My judgment was right."
"I don't want to sell any more than the absolute minimum. I'm not saying that we'll never sell even a single share, but I'll think in a balanced way about when and how. Alibaba still has plenty of room to grow. I'm in no hurry."
On the WeWork turnaround
Son: "The goal is to achieve $1 billion in quarterly revenue in 2020 and profitability in 2021."
"We've done a lot of soul searching on We's problems, and going forward, we'll maintain financial discipline and, as a rule, avoid making new investments to bail out companies in our portfolio."
On plans for a second Vision Fund
Son: "We've worried many of our partners [who had discussed investing in the fund]. We'll move forward and launch it in some form soon.
"We'd like to keep the scale on the small side, raise one or two years' worth of capital and show some results before launching the official second fund. We've started thinking of a two-step process as an option."
On SoftBank's October-December results
Son: "The tide has turned. First off, we're on track to move back into the black."
"SoftBank Group has only one performance metric: not operating profit, but shareholder value, or the value of shareholdings minus net interest-bearing debt. That has grown by 5 trillion yen ($45.5 billion) over the four months from the end of last September to now."
"The Sprint merger has entered its final stage and looks like it's about to be settled. We can operate a little more aggressively."