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SoftBank Poised to Reap $16 Billion Profit as Coupang Boosts IPO

Masayoshi Son’s latest payday continues to dispel the haters.
(Michael Vi)
(Michael Vi)
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SoftBank Group, the largest shareholder in Coupang, stands to “reap an enormous windfall when the South Korean e-commerce leader goes public this week,” Bloomberg reports.

Why It Matters: SoftBank founder Masayoshi Son has taken a lot of heat for some of the startup bets he’s made, including WeWork and Greensill Capital. But the Coupang hit continues to reverse that trend and sealed record profits for his Vision Fund over the last two quarters.

Numbers To Consider:

  1. Softbank owns around 35% of Coupang, and “could report an unrealized gain of as much as $16 billion after Coupang raised the target price range for its initial public offering.” It would be the SoftBank Vision Fund’s largest-ever startup profit recorded in a single quarter since it started reporting in 2017.
  2. SoftBank invested $1 billion in Coupang in 2015 at a value of $5 billion and $2 billion in 2018 at a value of $9 billion.
  3. Coupang is looking to raise $4.08 billion on an offering of 120 million shares between $32 and $34. Coupang would be valued at $58 billion at the top of that range.
  4. Coupang’s listing would be one of the biggest by an Asian company in the U.S. and the biggest since Alibaba’s $25 billion IPO in 2014.

Coupang’s Backstory: “Chief Executive Officer Bom Kim, a Harvard University dropout, founded Coupang in 2010 and has since grown the company into Korea’s version of Amazon.com Inc. The loss-making company has aggressively expanded its delivery and logistics operations, putting 70% of the country’s population within a 7-mile radius of its distribution centers, according to the filing. Coupang has also invested in new business lines like food delivery and streaming services.”
The Crystal Ball: Cliche as it is, the future is bright. SoftBank rode a global rally in tech to a $7.7 billion profit in the December quarter. Son’s firm sees around 10 to 20 public listings a year from its portfolio of 164 startups across multiple funds. “Even WeWork, an investment which lost more than 90% for SoftBank, has received interest from special purpose acquisition companies, the company chief told investors in December.”

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