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'We are unicorn hunters,' says Masayoshi Son

CEO of SoftBank group claims WeWork can be next Alibaba

SoftBank CEO Masayoshi Son speaks during the annual general shareholders meeting in Tokyo on June 20. (Photo by Wataru Ito)

TOKYO -- SoftBank founder and CEO Masayoshi Son is intent on taking the group back to its roots as an investor in tech companies and vowed to more than double its value at its annual shareholders meeting.

"We want to return to our original mission and become a strategic holding company," he said at the meeting in Tokyo, adding that he was in the process of shifting focus from operating telecommunications businesses in Japan and the U.S.

Softbank acquired Vodafone Japan in 2006 and U.S. mobile carrier Sprint in 2013.

Having put money into the likes of Yahoo and Alibaba early on, Son has earned a reputation as a savvy investor.

The meeting took place with SoftBank's backers having become increasingly frustrated at the recent lack of growth in its share price. The company's market capitalization stood at 8.8 trillion yen as of Tuesday, compared with a peak of 20 trillion yen ($181.5 billion) at the peak of the internet boom in 2000.

Softbank's other investments include ride-hailing companies like Uber Technologies, DiDi and Grab.

Last year, the company launched the Vision Fund, the world's largest tech-investment vehicle, with nearly $100 billion in committed capital. It has invested in about 30 companies, including British semiconductor maker Arm and U.S.-based shared-office provider WeWork.

Son said it was his "responsibility as manager" to make sure the market capitalization peak of 18 years ago is surpassed, and stressed that company's stock was worth more than its current price when taking into account its investment portfolio. Market capitalization would catch up with the actual value "like ivy," he joked.

On average, the fund puts about $1 billion into a new venture. By contrast, most conventional venture capital funds invest figures of between $5 million and $20 million.

"We don't make early stage investments," Son said. "We are unicorn hunters."

But not just any unicorn will do. "The business must have a strong leader and a management team that can execute its mission," said Son, who claimed he needs to "feel the force" from a manager before backing the company.

WeWork, which in Son's view can be the next Alibaba, "creates communities of businesses" and will "become a core company of the Softbank Group."

The SoftBank CEO also disclosed plans to relist Arm in about five years' time. Softbank acquired the company for about $31 billion in 2016. "We are front-loading investment in Arm to raise its value before taking it public," Son said.

Alibaba Group Holding's founder and Executive Chairman Jack Ma, a SoftBank board member, was present at the meeting. SoftBank is Alibaba's largest shareholder with a share of 29%.

"Personal contact and communication, exchange of ideas are critical and important," he said, slightly deflecting a question regarding his expectations for the company. Instead, he added, he was focused on "giving proper advice and doing the best job for Alibaba."

"We believe we have to do things for the future," he said. "Any problem today is not problem of the future."

Tadashi Yanai, another board member and founder of Fast Retailing, the company behind the Uniqlo clothing brand, said "I'm looking at what Son does with trepidation."

Many shareholders appear to have similar feelings, despite all the applause that made for a somewhat unusual shareholders meeting. "I feel I need to consider [my decisions] carefully," said one investor. But SoftBank was "an unusual company in Japan and would continue to grow," he conceded.

Another shareholder felt the stocks were a "definite buy" after hearing Son. While he agreed to a certain extent with Yanai, "[Son] does exciting things, so it makes me feel like keeping my stock for a bit longer," he said.

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