William Pesek is an award-winning Tokyo-based journalist and author of "Japanization: What the World Can Learn from Japan's Lost Decades."
If Masayoshi Son wonders about the verdict on his cosplay stint as a hedge fund guru, he should listen to the stampede of investors voting with their feet.
SoftBank shares have had a brutal few days since the Financial Times outed Son as the "whale" churning recent froth in tech circles. Son reportedly wagered $4 billion on options tied to Nasdaq shares. This, around the time shares of Amazon, Apple, Netflix, Tesla and others skyrocketed.
Turns out Son's 2017 purchase of New York based Fortress Investment Group was a trading position all its own. A head-scratcher at the time, the $3.3 billion deal telegraphed SoftBank's foray into playing the derivatives markets.
The pivot smacks more of desperation than audacity -- with a smidgen of melancholy. It is not Son experiencing this ennui, but anyone -- like me -- who reveled in the motivation behind the $100 billion Vision Fund he rolled out in 2017.
Back then, the stated mission was discovering and nurturing tech startups with scope to revolutionize the future. The Vision Fund's late-stage investment model would enable founders to focus less on constant fundraising and more on disrupting a complacent, smokestack-heavy present. It was simple: I have your back as you make a brighter tomorrow.
Son is not an altruist. His plan was to become even more fantastically rich, and that is fine. That is capitalism. It was nice, though, to know an investor with such deep pockets was on the case here, in the world's most populous and dynamic region.
Son hit some rough patches, and all too often fell prey to the "founder worship" that ascribes past success to a godlike omniscience. Son did exactly that with Adam Neumann of WeWork infamy. Neumann has since been forced out of the flailing office-sharing company, but egg still drips from faces at SoftBank headquarters.
Not just for underwriting Neumann's private jets, drug-fuelled parties and enough swanky properties around the globe to make Carlos Ghosn blush. Mostly for Son's "double down" on Neumann worship, tossing WeWork yet another life preserver last October even as investors rushed for the exits.
One Tokyo-based entrepreneur calls it the "Almost Famous problem." The reference is to Cameron Crowe's 2000 film about a young Rolling Stone writer who gets too close to the band his cover story is about. Son, the entrepreneur says, "ended up liking hanging out with one of Silicon Valley's rockstars, with the cool kids, and he lost his way."
Sadly, Son is still losing it. A happier ending would be Son redoubling efforts to support the next wave of disrupters. Heaven knows a fresh burst of invention is needed as COVID-19 makes all too many pre-pandemic norms seem obsolete.
New innovation is badly needed too to raise the bar on coronavirus testing and contact tracing, video conferencing, home schooling, food delivery, 3D printing, entertainment streaming, remote health care and mental health options. Ditto for technologies that make corporate offices and air travel safe again.
Instead the man who once backed such pursuits is staring at trading screens. Rather than plotting bets on promising startups in Fukuoka, Seoul, Jakarta, Bangalore, Hangzhou or, yes, Silicon Valley, Son is playing stocks. And SoftBank shareholders are letting him know it is not OK.
Humankind needs more visionaries wagering on the Davids of tomorrow taking on the Goliaths of tomorrow. If Son's team can multitask, then pumping up his trading account on the backs of tech giants stocks is fine. There's reason to worry, though, that trading is becoming the Vision Fund's main task.
Son is going full circle: betting on companies standing in the way of the startups he once championed. Son's "Warren Buffett of Japan" street rep derives from a 2000 bet on then-almost famous disrupter Jack Ma. Now, Ma's Alibaba is big-footing startups. Shareholders are right to worry Son, chastened by some big losses this year, is staggering in the wrong direction and imperiling innovation.
Another concern is that the market Son is betting on is currently at monstrously high valuations. In labeling SoftBank the "Nasdaq whale," the FT alleged that Son "stoked the fevered rally in Big Tech stocks." That, of course, is a role this one-man bubble blower has been playing for tech startups.
This late-stage foray into a truly bizarre stock rally could end terribly for SoftBank. How in the world can punters be bullish when the biggest economy has 6.3 million-plus COVID-19 infections? How can Washington and Beijing engaging in a trade brawl that puts Apple, Amazon, Netflix and others in harm's way be a "buy" signal? The Federal Reserve's cash can buy a lot, but it cannot change the laws of financial gravity.
Buffett, it is worth noting, is betting on gold and old-economy Japanese trading houses, not the Nasdaq. Might Son be setting shareholders up for a reckoning? When the SoftBank Hedge Fund is buying the market at the very top tick, it is doing it wrong.
As Son pivots from visionary to spectator, the narrative may shift from WeWork to WeLost. Not just among SoftBank shareholders, but the rest of us, too.