Following the surge in the value of U.S. headquartered ride-hailing giant Uber, SoftBank Group Corp’s Vision Fund cashed in on the same by selling close to $2 billion in Uber Technologies stock!
According to a filing with the United Securities & Exchange Commission, an affiliate of the investment fund called SB Cayman 2 sold 38 million shares of Uber at $53.46 apiece as well. However, SoftBank still holds about 184.2 million shares of which translates to $10 billion in current prices.
Ride-Hailing Sector: Finally Paying Off For Masayoshi Son
SoftBank’s founder Masayoshi Son aggressively invested in the global ride-hailing sector by grabbing major chunks of stake in companies such as Uber, Indian-origin Ola, Chinese-origin Chuxing and South Asia-based Grab.
All these wagers of Son started to look like they were on rough waters when Uber’s shares experienced a dip after its 2019 initial public offering post which the coronavirus further decimated the demand of ride-hailing.
But, now, Uber shares have more than tripled from their low in March 2020 as the capital markets have begun surging. According to media reports, Didi Chuxing which is the largest investment in SoftBank’s portfolio as of now is also considering an IPO in H2 2021.
Industry analysts currently believe that SoftBank Vision Fund may pave the way for Chuxing’s IPO after selling Uber shares.
Uber CEO Dara Khosrowshahi, to deal with the pandemic, initiated two huge rounds of layoffs and sliced off their more price intensive initiatives such as electric bikes and self-driving cars. As of now, the COVID-19 still continues to depress the demand for ride-sharing in the largest markets of the company.
But, according to Uber, at the same time, their food-delivery business Uber Eats has surged during the pandemic which is making up for much of their primary losses. Uber’s top management believes that delivery could be as big of a business as ride-hailing post COVID-19 being wiped out. Uber has vowed to turn a quarterly adjusted profit by the end of 2021.
SoftBank’s Future Prospects: More IPOs, Profits And Acquisitions
Along with the recovery of their investments such as Uber and several of its portfolio companies going public, SoftBank’s shares have also rallied. Masayoshi Son has sold off many assets in order to fund record buybacks of his own stock.
This year, after experiencing big profits from a round of IPOs in 2020, the Tokyo-headquartered company all set to take six more of its portfolio companies down the same route.
According to media reports, Didi, South Korean e-commerce giant Coupang Corp and Indonesian online mall operator PT Tokopedia will debut IPOs in 2021. Son’s SoftBank Corp currently has 100 startups among which many are potential targets for IPOs and acquisitions.
All in all, selling off $2 billion in Uber stocks suggest that SoftBank is currently recouping its investment so that it can inject funds into more growing targets, something that Son has been doing for a very long time. We will keep you updated on all future developments. Until then, stay tuned.