[HN Gopher] SoftBank Vision funds post record $39B annual loss
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SoftBank Vision funds post record $39B annual loss
Author : JumpCrisscross
Score : 144 points
Date : 2023-05-11 18:21 UTC (4 hours ago)
(HTM) web link (www.ft.com)
(TXT) w3m dump (www.ft.com)
| drexlspivey wrote:
| Masayoshi Son should really be a mod in r/wallstreetbets
| boeingUH60 wrote:
| Alongside Bill Hwang, who famously lost $20 billion by
| excessive leverage.
|
| https://www.bloomberg.com/news/features/2021-04-08/how-bill-...
| loeg wrote:
| Made the $20B through excessive leverage, too.
| unyttigfjelltol wrote:
| Tale old as time, they never quit when they're ahead.[1]
|
| [1] https://en.m.wikipedia.org/wiki/Jesse_Livermore
| NotYourLawyer wrote:
| Hwang couldn't have unwound his massive positions without
| crashing the prices. There was no quitting while you're
| ahead for him.
|
| I still really don't understand what game he was playing.
| prottog wrote:
| He definitely could have unwound his positions quietly
| over time. He'd have moved prices, sure, and his profits
| would have been less than what was marked to market, but
| nothing would have crashed. Forced selling from margin
| calls is what crashes prices.
| yieldcrv wrote:
| Hwang is the greatest. Most rich people just get
| comfortable/scared and go to index funds while there was
| absolutely no reason to stop given the amount of liquidity in
| the public markets.
|
| Ironically he ran out of liquidity, but it was a great
| example of what's possible.
| s5300 wrote:
| [dead]
| akomtu wrote:
| It's not "loss". The money of SBV (Saudis?) has changed hands and
| now belongs to whatever startups or funds they had invested in.
| phreeza wrote:
| And from there a lot of it presumably has flowed into cloud and
| advertising spend.
| mrguyorama wrote:
| Which basically means most of it went into rents paid to SV
| land holders.
| fullshark wrote:
| A lot of startup employees got paid...a lot of customers got to
| enjoy below market prices in the quest for growth for a few
| years...
| ninth_ant wrote:
| That's what "loss" means. They gave it away and didn't get it
| back.
|
| What else would it mean in this context?
| disordinary wrote:
| That's not a loss, that's an investment in an asset. It's a
| loss because the assets have devalued.
| snapcaster wrote:
| Come on man seriously. I KNOW you know what "loss" means in
| this context. Please stop
| akomtu wrote:
| Loss for some is gain for others. SBV could be a charity
| disguised as a predatory trust fund.
| watmough wrote:
| Seems like someone could use some corrective lenses.
| base3 wrote:
| From Uber to "Uber of dog walking".
| williamDafoe wrote:
| Their massive early investment in Uber distorted their reality
| and they expected ride sharing to be incredibly successful in
| other markets when it's not even successful in the USA - it's a
| fraud that pays below minimum wage off the backs of people who
| cannot do math. It has never made money anywhere ...
|
| ARM has had a laziness problem ever since the Apple A1 chip -
| there's a reason why nobody uses their 6-yr old layouts. ARM
| almost killed Qualcomm when they adopted A57 for the snapdragon
| 808 using the 64-bit arm design - that chip melted quite a few
| phones and this gave Exymos it's start!
| SilverBirch wrote:
| I do wonder if ARMs business model works long term. Imagination
| Technologies crashed the exact same way.
| mschuster91 wrote:
| They'll have Apple's (likely immense) license fees for at
| least a decade - Apple won't make another architecture change
| anytime soon. And the rest of ARM's business... it's not like
| there are any alternatives. China hasn't managed to create a
| competitor, and even if they do it may very well be
| sanctioned and so useless to the US and EU. Intel/AMD's x86
| is a dead end for the high-efficiency, low power market that
| ARM targets. PowerPC, MIPS and SuperH have been dead for
| years. There's always the possibility that RISC or some other
| open ecosystem rises, yes, but ARM is decades ahead and it
| would take absurd amounts of investments that I don't see
| appearing any time soon given the interest rate hike.
| peoplearepeople wrote:
| ARMs behavior lately is pushing a lot of riscv investment,
| my prediction is that Apple will migrate away from ARM
| 10years from now to something they can self-control, like
| riscv with some Apple-only extensions
| bhouston wrote:
| Apple has shifted its processor technology every 11 years
| for its desktop machines.
|
| But it has kept with ARM on iPhone for the last 15, so...
|
| Anyhow, it is hard to predict with accuracy that far out.
|
| That said, the first indications of a shift would be
| Apple adopting the RISC-V chip on the low end, things
| like the Apple Watch and Air Pods. Apple Watch has been
| using a 7N ARM chip since 2018 at nearly the same speed
| -- it seems like it doesn't need to be getter faster at
| each generation like the iPhone or MacBooks do. If
| adoption happens in this peripheral areas, then it is
| likely to move upstream to other devices over time.
| gumby wrote:
| Apple was an original investor in ARM and used ARM
| processors for Newton and a bunch of things like, I
| think, some of the time capsules.
|
| I believe they are using RISC V internally, for some
| small things that are invisible to the end user. It would
| make sense, just to get a feel for it in case it matters
| down the road.
| rollcat wrote:
| > They'll have Apple's (likely immense) license fees for at
| least a decade [...]
|
| I thought Apple has a special magic license, as they were
| one of the founding members of ARM?...
| gumby wrote:
| They sold their ARM stake in their near-death phase. They
| have an architectural license.
|
| At this point I assume their whole ARM portfolio has been
| designed from scratch and they are paying those license
| fees for patent licenses and bc they still use the ARM
| instruction set. Cheaper than switching.
| crazygringo wrote:
| Not being incredibly successful doesn't make it a fraud. I
| don't think anybody invested in it because Uber
| _misrepresented_ the market.
| henry2023 wrote:
| Design and implement over engineered solutions to avoid
| paying minimum wage across dozens of countries seems at least
| a little sketchy.
| maerF0x0 wrote:
| One thing uber did well is it helped break a market
| distortion in markets where you had to buy a badge, but
| they were supply limited and could sometimes fetch $1M
| which IMO makes no sense, if someone can do the job they
| should be allowed to.
|
| I'm not saying everything Uber did was great or right, but
| breaking that insanity is IMO a step of progress. Next we
| need to ensure gig workers make at least minimum wage after
| legitimate expenses.
| jazzyjackson wrote:
| > supply limited and could sometimes fetch $1M which IMO
| makes no sense, if someone can do the job they should be
| allowed to.
|
| I mean, it's new york city, there is not enough room for
| everyone to drive around all day looking for fares. It's
| also a unionization thing -- a supply cap ensures a good
| wage for everyone in the club.
| fredgrott wrote:
| tell that to FTX stockholders and clients.
|
| In loose IRS terms an engineered loss every year starts look
| like a hobby mis-telling the world that it is a business.
| dylan604 wrote:
| How many years did Amazon show losses and were allowed to
| continue without being called a hobby mis-telling the
| world?
| codyb wrote:
| Amazon was doing stuff though? Like getting books
| delivered to people's homes.
| dylan604 wrote:
| Uber is getting people from point A to point B just as
| advertised
| codyb wrote:
| I think GP was talking about FTX in this case.
|
| Uber also seemed a bit like a house of cards but I guess
| it's pulling out of that.
|
| Yellow cabs for me.
| TylerE wrote:
| Ironically the one good thing the rideshades did was to get
| taxis to install credit card readers. Taxis are often half the
| price of an Uber these days.
| osrec wrote:
| Which location?
| korm wrote:
| Not OP but it is often the case around London, UK. Half
| price isn't an exaggeration! Better cars usually too.
| ch4s3 wrote:
| The difference in London is pretty staggering. Cabs in
| Manhattan are pretty nice now too. Otherwise I find that
| ride shares are more available and nicer as an
| experience.
| [deleted]
| skibble wrote:
| What kind of taxi? Do you mean black cabs?
| grumple wrote:
| When I was in London a few weeks ago the taxi prices were
| 2-3x the uber prices. Also they'd tell you to fuck off if
| they didn't want to take you to that location.
| [deleted]
| zeristor wrote:
| Did you ask to go South of The River?
| kergonath wrote:
| Why would you ever do that? There is nothing south of the
| river. If there were anything worthwhile, they would have
| a tube station around.
|
| (I kid, I live in Peckham).
| robertlagrant wrote:
| Taxis are generally far more expensive than Ubers, and
| they don't quote up front, and they try and trick you
| with extra charges, and you can only summon them with an
| app because of Uber forcing them to engage in
| competition.
| xrd wrote:
| I used to love riding taxis because the drivers had such
| great personalities. I remember when a Jamaican guy in
| NYC told me all about the OTHER drug users driving
| around. He didn't have to worry about the rating system,
| so he was free to share all the dirt. It was a much
| better time. I wish more cab drivers and uber could tell
| me to fuck off.
| zachkatz wrote:
| Taxis in NYC are often (always?) way cheaper than Uber now.
| robertlagrant wrote:
| > Ironically the one good thing the rideshades did was to get
| taxis to install credit card readers. Taxis are often half
| the price of an Uber these days.
|
| And they made taxi summoning apps better and more
| commonplace. They basically dragged taxis into the 21st
| century, which was pretty much never happening without some
| actual competition.
| throw8383833jj wrote:
| where is this whole below minimum wage thing coming from?
|
| Everytime, I take an Uber or Lyft and calculate the hourly
| earnings of the uber driver minus vehicle miles, uber's take,
| and x2 the time needed (for the return trip), I come up with
| 15$-20$ an hour or so.
| fnordpiglet wrote:
| I've asked my Uber and Lyft drivers over the years about how
| they feel about their work. They seem generally ok because it's
| pretty flexible when they work and many people are doing it for
| supplemental income. I've yet to hear someone complain. I'm
| fact many of them, in nyc at least, are former taxi drivers
| that were being exploited mercilessly by the medallion holder.
| While Uber might be exploiting them just as hard or harder
| economically, they aren't forcing them to do 12 hour six days a
| week shifts over night and renting them the taxi on top.
| niccl wrote:
| There might be a selection bias there: the ones doing uber
| are the ones it works for. I only use taxis and several times
| I've had drivers who've been uber drivers and gone (back) to
| taxi for various reasons.
|
| Of course that's got a selection bias in it too...
| jjeaff wrote:
| It's basically an inefficient, but effective way to siphon
| money from the poor and middle class and deposit it into the
| bank accounts of the wealthy by utilizing the equity the poor
| and middle class have in their vehicles.
| crazygringo wrote:
| Nobody's forced to work for Uber. It's not "siphoning" money
| from anybody. Drivers are driving for it because it's the
| best job available -- often because of the flexibility that
| lets them do it around other scheduled commitments. Take that
| opportunity away and they become _worse_ off, not better.
| maerF0x0 wrote:
| You're not directly wrong, but many who are against
| uber/softbank/capitalists would mix in an implicit
| assumption that the investor class use desperation as a
| tool to force short term beneficial actions despite long
| term consequences. You can make $100 today to afford an
| airbnb and a cheese burger, but you'll have lost money when
| the repair bill (or purchasing the next car) comes due.
| hn_throawlles wrote:
| or if you wanna be a much blunter in saying this:
|
| because this society NEEDS that there exists poor people,
| essentially people unable to refuse a shitty job.
| maerF0x0 wrote:
| depending on what you mean by Needs, i actually disagree.
| For example we could all be a lot richer with automation
| ... it seems the price of goods typically plummet once
| they're automated and saturated. Eg: food, iirc food
| production uses like 95% less people than in the past and
| is cheaper than it's ever been (practically free, and the
| very poor can get it for free at foodbanks etc).
|
| I do think if we automate the production of lots of
| things the price will eventually drop as economics says
| it will. The hard part is the things we cannot automate
| but also need.
| asimpletune wrote:
| Yeah, it's crazy how much of the end-game of so much tech
| essentially boils down to something like this.
| JumpCrisscross wrote:
| > _to siphon money from the poor and middle class and deposit
| it into the bank accounts of the wealthy by utilizing the
| equity the poor and middle class have in their vehicles_
|
| What poor and middle class assets does SoftBank manage?
| (EDIT: Nvm. I misread "vehicle" as an investment vehicle.)
| _Parfait_ wrote:
| You completely missed the point made here, which was a very
| good one.
| HWR_14 wrote:
| He meant Uber. Uber is siphoning residual equity in
| people's vehicles into cash for Uber by underpaying for
| depreciation.
| dpflan wrote:
| Well said. Would like to see an economic / accountant
| analysis of this.
| mrguyorama wrote:
| Go look it up, it's been done before. Uber basically
| required you buy a new car in certain circumstances, and
| don't pay enough to keep up with gas, repairs, and value
| loss of running a car around.
| sokoloff wrote:
| Uber allows 16 year old cars in my city. If you're
| driving a paid-off 5+ year old Honda or Toyota, I think
| Uber's paying enough for you to turn a decent profit from
| driving for them.
|
| https://www.uber.com/us/en/drive/boston/vehicle-
| requirements...
|
| It probably isn't paying enough for you to buy a brand
| new car with a loan and drive that around for them. But
| they're not making you do that, either...
| ipaddr wrote:
| They are when you have no working car
| sokoloff wrote:
| Where are they making you buy a _brand new_ car? That
| seems like something I 'd have heard rancorous complaints
| about if it was actually happening.
| skybrian wrote:
| If we translate that from financial to real-world terms,
| it means that people aren't getting paid enough to cover
| wear and tear on their cars.
|
| I think that depends on how much you paid for the car and
| how long it will last (depends on quality, how good the
| maintenance is, and luck). Also, cash pays the rent and
| lower depreciation doesn't (unless you sell the car), so
| some people may prefer this to borrowing money.
| prepend wrote:
| Yet they are evidenced by people driving for Uber.
|
| I've driven a Prius for Uber and think so fared quite
| well using the irs mileage deduction rate to offset
| almost all my revenue and paid nearly no tax, legally and
| covered actual depreciation.
|
| It's funny to think 10 years of drivers are somehow
| idiots.
| ipaddr wrote:
| Wait until you find out how much cars are now when you
| have to replace your car 10 years earlier.
| prepend wrote:
| I think I'm already aware. I'm comfortable with my
| decision. I haven't driven in 5 years and I still drive
| my prius and probably have 100k miles left.
| Mistletoe wrote:
| The poor and middle class don't have investments. Source:
| all my co-workers and girlfriend's relatives that meet me
| with blank stares when I ask if they are saving for their
| retirement or maxing the company match for the 401k.
|
| Not judging that- the reality is somewhere in between they
| can't afford to do much but stay alive due to inflation and
| housing costs out of control and that they need to stop
| getting $7 Dutch Bros. coffee every day, DoorDash every
| night, and Taylor Swift tickets for $1000.
| maerF0x0 wrote:
| This is one thing that terrifies me. I'm sacrificing
| today to save for tomorrow while the masses are doing the
| opposite. And in a decade or 3 when I have assets they
| can out vote me and take it all back via taxes or rules
| that change the game
|
| Some examples are like - I paid off my student debt by
| not going to coachella or doing optional things (that I
| observed others doing). They might get it cancelled for
| free. They got Coachella + Education, I only got
| Education. Rinse and repeat for all sorts of delayed
| gratification steps.
| Apocryphon wrote:
| You can still go to Coachella today. Jeff Bezos did,
| after all.
| johntiger1 wrote:
| No, it's a way I can get a safe and reliable ride anywhere in
| the world, without getting scammed by a local taxi (not just
| Uber, but Lyft, Ola, Bolt etc.)
| hn_throawlles wrote:
| > It's basically an inefficient, but effective way to
| siphon money from the poor and middle class and deposit it
| into the bank accounts of the wealthy by utilizing the
| equity the poor and middle class have in their vehicles.
|
| if you're a thinking like a system, then yes,
|
| > No, it's a way I can get a safe and reliable ride
| anywhere in the world, without getting scammed by a local
| taxi (not just Uber, but Lyft, Ola, Bolt etc.)
|
| if you're thinking like a human individual, then yes.
|
| I agree with you both and I told you why
| henry2023 wrote:
| Safety and reliability are not mutually exclusive with
| exploitative. It can be both.
| prepend wrote:
| Sadly, taxis were never both until Uber.
|
| Even in Manhattan, getting a taxi at 2am was a crap
| shoot. I can an Uber in the suburbs at 2am anywhere in
| the country.
|
| That's neat.
| eganist wrote:
| > Even in Manhattan, getting a taxi at 2am was a crap
| shoot. I can an Uber in the suburbs at 2am anywhere in
| the country.
|
| You certainly can call an uber, yes. Whether they come
| through or whether they find a suitable reason to cancel
| on you... that's a crapshoot.
| CamperBob2 wrote:
| It's just plain bad faith not to acknowledge that the
| scenario you describe was 10x more likely to happen with
| taxis.
| prepend wrote:
| I've never been stranded by Uber. Sometimes drivers
| cancel, but I've never been stranded with no drivers as
| there's someone else.
|
| Taxis failed very frequently.
|
| I can reliably plan with Uber. Taxis were a crapshoot.
|
| And I've never had the credit card reader broken in Uber
| and it seemed like every taxi had a busted machine.
| shp0ngle wrote:
| It doesn't get the wealthy especially rich either, looking at
| the losses.
|
| Who gets rich on Uber and similar apps are all the
| programmers that visit this website, we make good money on
| all those schemes. We get paid really well. We are who really
| gets the best deal in all this.
|
| (Now I need to hide away before the flying shoes hit me.)
| mym1990 wrote:
| The wealthy got rich at the IPO stage at the expense of the
| public, much like most tech IPOs.
| spaceman_2020 wrote:
| as an end user, I got a pretty good deal for quite a while.
|
| I'm always surprised that VCs assume that customers are
| morons and will keep buying the same product even when its
| not a good deal anymore. Uber's terms of the deal changed,
| so I don't buy the product anymore. Simple as.
| bombcar wrote:
| The goal is to _kill_ all the alternatives so you have no
| choice. Uber wanted to kill all taxis everywhere, then
| they 'd have a monopoly.
| SoftTalker wrote:
| Uber wanted to attack all the things that were bad about
| legacy taxi service. They did, and it was better for many
| people. But they were foolish if they thought taxi
| services would not respond and competitors would not
| emerge.
|
| Ultimately they wanted their cars to be self-driving.
| They don't want to pay drivers at all. But there was and
| is no proof that it is possible in the time frame of
| their runway.
| adrr wrote:
| Then why isn't it financially successful? If riding sharing
| costs are much lower than incumbents like taxis shouldn't it
| be raking in cash?
| oatmeal1 wrote:
| https://archive.ph/eOKEr
| testfoobar wrote:
| Was SoftBank and Masayoshi Son a zero interest rate phenomenon?
| cs702 wrote:
| ...on around $100B of capital raised.
|
| i.e., -39%. Poof!
|
| So far.
|
| --
|
| For those here who don't know, Masayoshi Son almost lost
| everything in the dotcom bust of 2000-2002.
|
| A single investment saved him from ruin back then: Alibaba. Was
| that luck or skill? In hindsight, it looks a lot like luck to me.
|
| Either way, he's clearly a bet-the-farm-and-actually-can-lose-
| the-farm kind of guy.
| httpz wrote:
| He started from nothing and he's still a billionaire so I
| wouldn't just dismiss him like that.
|
| He's just a different type of businessman who likes making big
| risky bets.
| lotsofpulp wrote:
| People on this forum should be very happy a guy like him
| exists who can efficiently transfer wealth from rich Middle
| Easterners to employees of tech companies.
| prottog wrote:
| As I've heard it stated elsewhere, startups are an
| inefficiency between the transfer of wealth from VCs to Bay
| Area landlords.
| Danieru wrote:
| Except get this: that middle east money is safe. It is
| softbank itself which takes the upside and downside to the
| vision fund. The middle east money earns a fixed and
| constant return.
|
| I am very glad I sold my softbank shares two years ago. Son
| is a gambler with horrible bet sizing skills.
| themitigating wrote:
| I know what you mean by "bet the farm" but let's remember that
| he won't ever go hungry or be homeless.
| mrguyorama wrote:
| Easy to do when you only have to bet other people's farms.
| selimthegrim wrote:
| They will be buying the farm at this rate
| DarthNebo wrote:
| Should've just invested in public cloud providers :D
| BonoboIO wrote:
| Or go to a casino. Would have more chances.
| noizejoy wrote:
| Has anyone seen an analysis of what percentage of economic
| activity is just redistribution of wealth more adjacent to
| gambling, compared to economic activity that is more tightly
| coupled to cost of delivering goods and services?
|
| And just in case it's not obvious: This question comes to mind as
| I would categorize SoftBank pretty firmly in the gambling niche -
| at least compared to a local plumber or Uber driver.
| lotsofpulp wrote:
| I have benefited greatly from the proliferation of internet and
| app based taxi services.
|
| >compared to economic activity that is more tightly coupled to
| cost of delivering goods and services?
|
| How do you measure this? Was it possible that the size of
| Softbank's investments is what can lead to the possibility of
| creating two sided markets like Uber?
| ren_engineer wrote:
| SoftBank is a meme at this point but I'd imagine most VCs are
| down on paper as well, rising interest rates crushed the
| valuation of pretty much every startup
| mrguyorama wrote:
| It's almost like none of them had any actual value, and the
| vast majority of them were just attempts to crush and take over
| existing markets using outside war chests.
| maerF0x0 wrote:
| I think a very large percent of them had a nonzero value, but
| the issue is if you can get 4% guaranteed return on cash, vs
| risky 1% return on cash suddenly the asset is worth less than
| before.
|
| But if you can get unlimited money at 0% you might as well
| invest it on 1% return bets. You're still making money on
| others' money.
| lotsofpulp wrote:
| I would have thought the issue was the lack of net income.
| jacquesm wrote:
| > I'd imagine most VCs are down on paper as well
|
| No need to imagine. Early stage is doing quite well, series 'A'
| and onwards not so good, with some variation due to the various
| industries.
| [deleted]
| evbogue wrote:
| https://archive.ph/eOKEr
| RcouF1uZ4gsC wrote:
| > Yoshimitsu Goto, the tech conglomerate's chief financial
| officer, said on Thursday that the company would not miss
| opportunities to invest in new technology such as ChatGPT, but
| cautioned that it was not ready to accelerate its deal activity.
|
| Apparently Saudi Crown Prince Mohammed bin Salman didn't read the
| classic essay: "Goto considered harmful" before making massive
| investments in SoftBank.
| NotYourLawyer wrote:
| He was probably thinking of Goto Dengo, who would have been a
| great investment.
| jsemrau wrote:
| My favourite conspiracy theory lately is that the Saudis needed
| to increase the oil price to recover losses from their VC
| investments.
| sremani wrote:
| I am not sophisticated investor or commodities trader -- but
| I do not think Oil prices work that way. The problem for
| Saudis always has been whatever cuts to production they make
| were fulfilled by others who exceed the quota. There are many
| oil rich but cash desperate parties out there. It's much easy
| for Saudis to create a panic than delicately reach a target
| price.
|
| May be I am wrong, but experienced commodity traders can
| respond and correct me.
| vxNsr wrote:
| That's why it was so helpful to them when Biden was
| elected, he immediately implemented policies that futures
| traders felt spelled decrease in supply both short and long
| term, that along w the war in Ukraine made for a very
| successful year.
| prottog wrote:
| And yet crude oil prices are now lower than they were
| prior to the breakout of the war in February 2022. Funny
| things, these markets!
| lotsofpulp wrote:
| And like most conspiracy theories, it makes no sense. As if
| businesses choose to sell at a lower price than they could be
| selling at, and then switch to selling at a higher price if
| they feel like earning more money. Especially with a fungible
| commodity like oil.
| MisterBastahrd wrote:
| What better way to do that than to pay a couple hundred
| million a year to each washed up soccer player they can
| recruit to play in the desert?
| chunk_waffle wrote:
| They _lost_ basically the GDP of Estonia...
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