SoftBank CEO defends track record, tells US investors he'll be more careful

Current Affairs
SoftBank Group Corp Chief Executive Masayoshi Son, under tension from support stock investments Elliott Management to get control over his inconsistent venture style, turned on the enchant in a gathering with US financial specialists on Monday, however offered not many solid concessions.
"I guarantee you I'll begin to be increasingly cautious and tune in. My view doesn't change, however my conduct turns into somewhat more cautious," sources cited Son as telling speculators who went to his introduction at the Lotte New York Palace lodging in Manhattan. Child, who incorporated SoftBank with an innovation venture powerhouse, is currently guarding his reputation after a few of its costly wagers on new businesses, including office space-sharing firm WeWork, soured.
Elliott, which directs $40 billion in resources, has had conversations with SoftBank's administration and is approaching the organization to repurchase some $20 billion of its stock, improve its administration by expanding the autonomy and decent variety of its board and improving straightforwardness, sources said a month ago. Child said on Monday he had not offered enough weight to the thoughts of speculators and the organization's free board individuals, as per three sources who went to the gathering which was shut to media and gave subtleties on state of namelessness.

Child highlighted SoftBank's stock exchanging at a major markdown to the estimation of its benefits as an open door for financial specialists to purchase in. His way to deal with putting vigorously in organizations with troublesome innovation potential and giving full power to the originators of new businesses he backs has helped make him one of the world's wealthiest financial specialists. However it has additionally prompted bungles that have flawed SoftBank's exhibition...READ MORE

SoftBank's Yahoo Japan confirms merger talks with messaging app Line

International News
SoftBank's Yahoo Japan, one of Japan's top internet firms, confirmed it is in talks to merge with Line Corp, a $27 billion union that would bring the messaging app operator under the SoftBank umbrella in a major tech shake-up.
Yahoo Japan, which last month changed its name to Z Holdings , said on Thursday discussions were underway with Line but nothing had been decided. SoftBank Corp, which owns almost half of Z Holdings, also acknowledged the talks.
Shares in Z Holdings, which had a stock market value of about $17 billion at Wednesday's close, jumped 14.8 per cent.
Shares in Line, which is valued at about $10 billion, were untraded with a glut of buy orders.
Sources told Reuters the previous day a deal was likely by month-end and could see SoftBank Corp and Line's parent Naver Corp form a 50/50 venture that would control Z Holdings, which would in turn operate Line and Yahoo.
Line said in a statement it was true it is considering ways to improve its corporate value but nothing had been decided.
A deal would bring together the operators of two of Japan's biggest QR code payment apps as the country belatedly shifts to cashless payments. SoftBank's PayPay recently hit 19 million users through aggressive marketing, while Line Pay can tap the 82 million Japanese users of the Line app.
Line, which last year sold a majority stake in its mobile unit to SoftBank, has reported three consecutive quarters of operating losses as the company tries to jump-start growth.

Z Holdings made a move in September to take control of fashion e-tailer Zozo Inc in a $3.7 billion deal, as it bulks up against rivals such as Amazon.com. ...READ MORE

Uber puts brakes on growth at any cost strategy and investors will be happy

International News
Uber Technologies Inc seems to have decided to stop chasing stupid growth. This is exactly what investors wanted, yet the company’s latest results, announced on Monday, show how far Uber has to go to be sustainable and rational.
In the third quarter, the total value of Uber rides, restaurant meal deliveries and other transactions increased 29% from a year earlier — the slowest rate of increase since Uber began reporting that figure. The total figure of $16.5 billion was also a little short of analysts’ expectations, as was the growth in average monthly customers using Uber services at least once. That most likely contributed to the after-market decline in Uber shares.
What Uber seems to be doing is precisely what investors want now. The company is trying to stop growing where it doesn’t make sense. Third-quarter revenue from rides, excluding what Uber classifies as excessive driver incentives and driver referrals, increased 23% in the quarter, rebounding from a growth slowdown. The adjusted revenue growth for Uber Eats, the restaurant delivery service, also accelerated.
The divergence between slowing growth in total transactions and a faster pace of revenue in crucial segments suggests that Uber has increased consumer prices, reduced incentives or made other tweaks to keep more revenue from each ride or food delivery — even if that means some people are turned off enough not to use Uber at all. This is rational, yes, but acting like a sensible company may also crimp Uber’s eventual size and ambition.
Uber also said it’s aiming to have positive adjusted earnings before interest, taxes, depreciation and amortisation in 2021. That is far earlier than analysts have expected Uber to be profitable — or profitable-ish. Lyft made a similar pledge last month to be in the green by the end of 2021 on a massaged profit number that excludes stock compensation and some other costs.
It’s useful to step back and see how much has changed for Uber, Lyft and other young and richly-valued companies. Ever since these companies went public in the first half of this year, Uber and Lyft have been forced to shift gears and chase profits, or some semblance of them, rather than boasting about how big they can grow if they swallow more of people’s current spending on transportation.

This is the new normal for young companies like Uber: Investors want them to grow, but not if the growth is achieved with unsustainable spending or rash financial trade-offs. There in the penalty box is WeWork, the office leasing startup that did exactly that.READ MORE