President Joe Biden stops to talk to the media as he drives a Ford F-150 Lightning truck at Ford Dearborn Development Center, Tuesday, May 18, 2021, in Dearborn, Mich. Left: James Kendall is the Senior Pastor at Grace Community Church in Madera, California. Kendall gave a sermon at his church warning congregants about QAnon. Right: Ben Marsh is a pastor at First Alliance Church in Winston-Salem, North Carolina. He has seen members of his church share conspiracy theories on their social media pages. Carlos Ghosn says he has to tell his side of the story TOPSHOT - Former Renault-Nissan boss Carlos Ghosn looks on before addressing a large crowd of journalists on his reasons for dodging trial in Japan, where he is accused of financial misconduct, at the Lebanese Press Syndicate in Beirut on January 8, 2020. - Ghosn arrived at the venue, making his first public appearance since skipping bail in Japan. The fugitive tycoon, who denies any wrongdoing, skipped bail while awaiting trial on multiple charges of financial misconduct including allegedly under-reporting his compensation to the tune of $85 million. (Photo by JOSEPH EID/AFP via Getty Images) B25_25594_R James Bond (Daniel Craig) prepares to shoot in NO TIME TO DIE, an EON Productions and Metro-Goldwyn-Mayer Studios film Credit: Nicola Dove © 2020 DANJAQ, LLC AND MGM. ALL RIGHTS RESERVED. NEW YORK, NY - AUGUST 8: After dropping off passengers at a Broadway play, Johan Nijman, a for-hire driver who runs his own service and also drives for Uber on the side, drives through the West Side of Manhattan on Wednesday evening, August 8, 2018 in New York City. On Wednesday, New York City became the first American city to halt new vehicles for ride-hail services. The legislation passed by the New York City Council will cap the number of for-hire vehicles for one year while the city studies the industry. The move marks a setback for Uber in its largest U.S. market. Nijman, a member of the Independent Drivers Guild who has been driving in various capacities since 1991, says the temporary vehicle cap is a good start but he would like to see the city do more to deal with the over-saturation of vehicles and new drivers. (Photo by Drew Angerer/Getty Images) (CNN Business) — In the second half of 2017, Uber was in a state of disarray. Travis Kalanick, the hard-charging cofounder and CEO who built Uber into a global force, stepped down after months of crises. The startup was hobbled by boardroom battles and a virtually empty C-Suite. And its chief US rival, Lyft, was raising more money and expanding its footprint across North America. Against that backdrop, SoftBank CEO Masayoshi Son struck a deal to invest billions in Uber at a steep discount. Now, that decision could pay off in a big way for Son and further his ambitious bid to reshape the technology and venture capital landscapes. Uber is expected to pull off the biggest IPO of the year this week, with a fully diluted valuation that could top $90 billion. And SoftBank (SFBTF), a Japanese conglomerate, owns 16.3% of Uber, making it the single largest stakeholder, according to the company’s IPO prospectus. SoftBank (SFBTF) acquired most of that stake by buying shares from existing shareholders at a $48 billion valuation – in what was essentially a mini-IPO – down from the $70 billion it had most recently been valued at on the private market. On Thursday, SoftBank said the value of its stake in Uber had increased by $3.8 billion, a significant gain in a remarkably short period of time. But that amount will change depending on how Uber’s stock performs after it goes public, as SoftBank expects to hold onto most of its stake after the IPO. For SoftBank, and its eccentric billionaire CEO, there’s more at stake than a quick return. SoftBank is in the process of shifting from the telecom business to focusing on investing in technology companies, with the goal of accelerating and capitalizing on tech trends reshaping entire industries ranging from construction to agriculture. The main vehicle for that has been the Vision Fund, a $93 billion investment fund launched in 2017 and backed by the likes of Apple (AAPL) and Saudi Arabia’s Public Investment Fund. Son, famous for making an early and absurdly lucrative bet on Alibaba, informed investors that he planned to devote “97% of my time and brain” to investing in unicorn companies with the potential to be “the number one players in the market.” Skeptics, however, may have remembered another detail Son is famous, or infamous, for: losing most of his net worth when the Dot Com bubble burst. The Vision Fund quickly rattled traditional venture capitalists, arguably drove up startup valuations and put Son and his firm in a position to exercise influence over prominent startups like Uber and WeWork. What it has yet to do is show that investing tens of billions of dollars in private companies in a relatively short amount of time – usually by making a minimum investment of at least $100 million, a figure that would have been unfathomable a decade ago – is a good and sustainable strategy. Uber’s IPO will be “the first real litmus test” for SoftBank’s investment strategy, said Kartik Hosanagar, a professor at the Wharton School of the University of Pennsylvania. “It’s their first investment to go public and also one of their larger investments.” But Uber may prove to be just the first of several Vision Fund investments to go public this year. Slack, a workplace communication tool, and WeWork, a coworking behemoth mostly recently said to be valued at $47 billion, have both filed to go public. SoftBank and the Vision Fund have collectively invested billions of dollars in WeWork, which Son once said could be the “next Alibaba.” (Others, however, have described WeWork in more unfavorable terms as a risky real estate arbitrage play, where it leases properties, dresses them up and looks to rent them out for more money.)<doc-sep>FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato/File Photo TOKYO (Reuters) - Shares in Japanese conglomerate SoftBank Group Corp tumbled 5.5% on Friday, a day after one of its biggest tech bets, Uber Technologies, priced its initial public offering at the low end of the targeted range. A successful market debut of Uber will be seen as a test of SoftBank’s investment strategy, as other big tech firms in its almost $100 billion Vision Fund also head toward public listings. Uber’s listing is the most anticipated IPO since Facebook Inc’s market debut seven years ago, and the world’s largest ride-hailing firm hopes its conservative pricing approach will spare it the trading plunge suffered by rival Lyft Inc. “(SoftBank) shares have gone up ahead of Uber’s IPO, but some investors may have sold shares once the price was decided,” said Tsutomu Yamada, a market analyst at Kabu.com Securities. The value of Vision Fund’s stake in Uber grew 418 billion yen ($3.8 billion) last year. Shares in SoftBank tumbled as much as 5.5% on Friday, its biggest percentage drop in five months, wiping $6 billion off its market capitalization. The group is now valued at around $104 billion. SoftBank’s transition away from telecoms toward tech investments accelerated with the 2.35 trillion yen listing of a third of its domestic telco SoftBank Corp in December in what was Japan’s largest-ever IPO. That provided the funds for a share buyback that has helped drive up the parent group’s stock by nearly 50 percent this year. Pledging to enhance shareholder returns, SoftBank Group announced a stock split on Thursday, while leaving the per-share dividend unchanged for the current financial year, effectively doubling its shareholder payout.<doc-sep>We’ve known practically since Uber started dispatching rides that one day it would make a lot of people very rich. But it’s also possible that the company could turn out to be a bad bet for some of its biggest investors. Uber Technologies Inc. went public on the New York Stock Exchange today, following one of the biggest IPOs ever. The debut brings a formal and symbolic end to Uber’s startup days, which lasted the better part of 10 years even as Uber grew from a brash startup to a global, multibillion-dollar company that changed transportation forever. Uber priced its shares last night at $45 apiece, valuing the company at about $82 billion. At that price, 10 Uber shareholders would have come out of the IPO with stock holdings worth $1 billion or more, while another 15 have stakes worth at least $1 million. The billionaires include three original Uber employees—co-founders Travis Kalanick and Garrett Camp, and the company’s first CEO, Ryan Graves—while the millionaires are a mix of firms, company executives, and individual investors. (Uber board member Arianna Huffington just missed the $1 million threshold at the $45 IPO price, with a total stockholding value of $990,000.) It’s not quite that simple, though. Bankers had reportedly sought a $120 billion valuation for Uber, and the $45 IPO price fell far short of that. It’s likely the company suffered from the disappointing March IPO of competitor Lyft, which priced its stock at $72 a share but traded down almost immediately. Shares of Lyft were trading around $51 this morning, about 30% below the IPO price. Despite tempering expectations for its IPO, Uber opened down shortly before noon ET. The company’s stock tumbled about 5% out of the gate, to the $42 range. How Uber fares on the public markets is crucial for its existing investors. Uber’s biggest shareholders are the Softbank Vision Fund, Benchmark Capital Partners, and Uber co-founder and former CEO Travis Kalanick. But not all of them bought stock at less than $45 per share—or less than $42—meaning a large portion of their holdings could currently be underwater. Softbank Japanese tech giant Softbank became Uber’s single largest shareholder in January 2018 when it took a roughly 15% stake in the company. Softbank did this deal in two parts. It bought up shares from employees and existing stockholders at $32.97 per share, a discount to Uber’s private valuation at the time. It also bought stock at Uber’s current valuation, or $48.77 per share. That implies a solid chunk of Softbank’s Uber stake is currently worth less than Softbank paid for it. On the other hand, the discounted shares it purchased from employees and other investors are still looking like a good deal. Softbank put another $333 million behind Uber’s driverless car research efforts in April that valued that unit independently at $7.25 billion. Softbank and its enigmatic chairman and CEO Masayoshi Son believe “all industry will be redefined like Uber,” as Son said on a quarterly earnings call in November 2016. Benchmark Next up on the billionaires list is Benchmark Capital Partners, the quintessential Uber frenemy. The firm helped push Kalanick out of Uber in June 2017 and sued him in two months later for fraud, breach of fiduciary duty, and “gross mismanagement.” It dropped that lawsuit in January 2018. Benchmark invested in Uber’s Series A financing back in February 2011, when the company was valued at a now comically small $60 million, so it’s bound to make out well in the IPO. According to data from venture-capital research firm PitchBook, the stock was valued at just $3.70 per share in that Series A round—roughly 8% of the $45 IPO price—and Benchmark paid a lot less than even that. The share price rose to around $14 in later rounds Benchmark participated in, according to PitchBook. Benchmark holds about 150 million shares of Uber stock, worth $6.8 billion at the IPO price. Travis Kalanick Uber’s controversial co-founder is its third-largest shareholder, with 117.5 million shares. At the IPO price, that holding was worth $5.3 billion. As the company’s co-founder, Kalanick presumably got his shares at a good price and stands to get quite the windfall from the public offering, despite the underperformance of the stock. Other major shareholders How the rest of Uber’s biggest shareholders fare will come down to what they paid relative to what the public markets think Uber is worth. Investors with a lot of money on the line include the Saudi Arabia Public Investment Fund, which put $3.5 billion into Uber in June 2016, then the biggest investment ever by a single investor; Alphabet; Lowercase Ventures; First Round Capital, and TPG Holdings. Then of course there’s the question of how employees who took the bulk of their compensation in stock grants will do if Uber underperforms. The early ones at least should still make out quite well. A former Uber employee told Quartz that in Uber’s early years, the strike price on employee shares could be as little as two cents. “It’s safe to assume the first few hundreds paid very little to exercise their stock,” said Lane Kasselman, a former communications executive at Uber. “It’s hard to imagine a scenario where they don’t see a great return.” Want a better understanding of the 2019 IPO landscape? Sign up for a free trial of Quartz membership and check out our premium field guide to the tech IPO boom.<doc-sep>NEW A vastly improved search engine helps you find the latest on companies, business leaders, and news more easily.<doc-sep>
Masayoshi Son knows a thing or two about big bets. The Softbank chairman and CEO famously invested $20 million for a 34% stake in a little known Chinese eCommerce startup back in 2000. When that company — Alibaba (BABA) — went public 14 years later, that stake was worth $50 billion. Today its market cap is more than $475 billion. Son is hoping to strike gold now that Uber (UBER) has gone public in the largest IPO since Alibaba. With a 16.3% stake in the company, Son’s Softbank Group is the biggest shareholder of the ride-hailing company and stands to gain billions. “This has been the master plan all along for Son, which is to pick a few mega-winners that will do well in an IPO that will enable [the Vision Fund] to fund the next round of more and more tech unicorns,” said Marc Einstein, chief analyst, telecommunication and digital services at ITR Corp. This time, Son won’t have to wait 14 years. Softbank purchased Uber shares at a steep discount, during a tumultuous time. The sale in December 2017 was priced at $33 a share, valuing the company at $48 billion, months after founder Travis Kalanick resigned from the top post and amid a stream of negative headlines, including allegations of sexual harassment at the company. On Thursday, Uber priced its IPO at $45, raising over $8.1 billion and valuing the company at $82 billion. Credit: David Foster/Yahoo Finance Uber’s IPO marks the first big public exit for Softbank’s Vision Fund, Son’s near $100 billion bet on emerging technology, driven by artificial intelligence. Fueled largely by the sovereign wealth funds of Saudi Arabia and Abu Dhabi, the world’s largest tech fund has placed bold investments in companies like WeWork, Slack, and Arm Holdings, reshaping the venture capital landscape. In the process, it’s also helped shape the global ride sharing market. In addition to its stake in Uber, Softbank has invested billions in Chinese rival Didi Chuxing, Singapore’s Grab, Ola in India, and Brazil’s 99. The capital injections have allowed Uber’s overseas rivals to go toe-to-toe with the company, enabling those companies to offer steep discounts, often to the detriment of Uber. Story continues In fact, the company cited the Japanese fund’s investments in competitors among the risk factors in its prospectus, saying “These investments or strategic transactions, along with other competitive advantages discussed... may allow our competitors to compete more effectively against us and continue to lower their prices.” Autonomous driving In a recent interview with CNBC, Son said his investments in the ride-sharing space stem from his belief in the potential of autonomous driving technology, an area Softbank has also bet on through investments in GM’s Cruise and Uber’s autonomous driving unit. That development, he explained, would make these companies more profitable. “When autonomous driving comes, the cost of providing the service dramatically gets more efficient … lower rate of accidents, lower costs, more reliable timing,” he said. “You have to have scale and you have to have big market share. That’s why we have the number one market share company in every country around the world.” The stiff competition has resulted in consolidation among Softbank’s portfolio companies in at least one market. Last year, Uber sold its Southeast Asia business to Grab, in exchange for a 27.5% stake in the rival company, a transaction that led to speculation that Softbank had orchestrated the deal. In other markets, the fund’s investments in rivals have magnified Uber’s losses. While its exit in China preceded the Softbank investment, Uber’s key Chinese rival Didi has used its own Softbank funds to put up a fierce fight in key Latin American markets Brazil and Mexico. Indian rival Ola, also backed by Softbank, began operating in Australia last year, challenging Uber in a market it has dominated. The investments have extended to food delivery, where Softbank led a $535 million funding round for Uber Eats rival Doordash last year. “You can’t draw a line and say ‘Softbank has invested, therefore competition is going to stop,’” said Chris Lane, a senior analyst of Asia Pacific telecommunications at Sanford C Bernstein. “These companies are still playing out their strategies, they’re still trying to succeed as much as they can in a land grab.