Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> was revealed on Friday as the massive NASDAQ whale helping to drive unprecedented option volume in recent weeks with its multi-billion dollar call-buying spree in the biggest tech names, as reported by <a href="https://www.ft.com/content/75587aa6-1f1f-4e9d-b334-3ff866753fa2" target="_blank" rel="noopener">Financial Times</a> and <a href="https://www.wsj.com/articles/softbanks-bet-on-tech-giants-fueled-powerful-market-rally-11599232205" target="_blank" rel="noopener">The Wall Street Journal</a> which confirmed speculation Thursday by <a href="https://www.zerohedge.com/markets/speculation-emerges-over-identity-mystery-marketwide-call-buyer" target="_blank" rel="noopener">Zero Hedge</a>.Softbank's option trades added to $40 billion in call-buying over the past month traced to retail investors. The resulting frenzy netted Softbank <a href="https://www.ft.com/content/53aa19bb-fc9a-46fd-aafd-4bc3669ab161" target="_blank" rel="noopener">$4 billion in option trading gains—on paper—</a>on its own <a href="https://www.wsj.com/articles/softbanks-bet-on-tech-giants-fueled-powerful-market-rally-11599232205" target="_blank" rel="noopener">$50 billion notional exposure</a>. By comparison, Softbank's newly acquired long positions in <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a>, <a href="https://www.smartkarma.com/entities/alphabet-inc-cl-c" target="_blank" data-smartkarma-citation="entities:11369:1" rel="noopener">Alphabet Inc Cl C (GOOG US)</a>, <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a>,  and <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> are worth just <a href="https://www.ft.com/content/3eec59a3-cb51-487c-aacd-68a0c7e46f2f" target="_blank" rel="noopener">$2 billion</a>, almost all that's left of the $10 billion Softbank spent late in the June quarter buying and selling mostly tech stocks at heady prices. Those holdings now are also subject to sharp declines triggered when Softbank's option scheme was revealed. Sure enough, Softbank <a href="https://www.ft.com/content/9e5827e9-893a-453e-b28d-88c1c0adc9d5" target="_blank" rel="noopener">lost $9 billion in market value</a> on Monday.There's plenty of intense scrutiny underway to understand these trades and what their impact ultimately proves to be. I'm more interested in Softbank's drastic change in strategy and its alternative deployment of cash from $40 billion raised in stock fire sales forced by its wary banks and legacy mega-investors who cut him and Softbank off after decades of seemingly endless billions in available funding when his recklessness netted Softbank and Vision Fund tens of billions of dollars in record losses. This certainly is not what Softbank told investors to expect mere weeks ago.Instead, Softbank's actions signal arrogance, or desperation, or worse—that CEO Masayoshi Son feels unrestrained and back in his Star Wars Zone with $40 billion in fresh cash.<div class="content-highlight">Read on for a Bond Angle deep dive into the belly of Softbank, The Whale, and what Son feels free to do with its $40 billion in cash that was pledged to bolster Softbank's bloodied balance sheet.</div>

Softbank Group (9984 JP) was revealed on Friday as the massive NASDAQ whale helping to drive unprecedented option volume in recent weeks with its multi-billion dollar call-buying spree in the biggest tech names, as reported by Financial Times and The Wall Street Journal which confirmed speculation Thursday by Zero Hedge.Softbank's option trades added to $40 billion in call-buying over the past month traced to retail investors. The resulting frenzy netted Softbank $4 billion in option trading gains—on paper—on its own $50 billion notional exposure. By comparison, Softbank's newly acquired long positions in Amazon.com Inc (AMZN US), Alphabet Inc Cl C (GOOG US), Microsoft Corp (MSFT US),  and Tesla Motors (TSLA US) are worth just $2 billion, almost all that's left of the $10 billion Softbank spent late in the June quarter buying and selling mostly tech stocks at heady prices. Those holdings now are also subject to sharp declines triggered when Softbank's option scheme was revealed. Sure enough, Softbank lost $9 billion in market value on Monday.There's plenty of intense scrutiny underway to understand these trades and what their impact ultimately proves to be. I'm more interested in Softbank's drastic change in strategy and its alternative deployment of cash from $40 billion raised in stock fire sales forced by its wary banks and legacy mega-investors who cut him and Softbank off after decades of seemingly endless billions in available funding when his recklessness netted Softbank and Vision Fund tens of billions of dollars in record losses. This certainly is not what Softbank told investors to expect mere weeks ago.Instead, Softbank's actions signal arrogance, or desperation, or worse—that CEO Masayoshi Son feels unrestrained and back in his Star Wars Zone with $40 billion in fresh cash.Read on for a Bond Angle deep dive into the belly of Softbank, The Whale, and what Son feels free to do with its $40 billion in cash that was pledged to bolster Softbank's bloodied balance sheet.

Softbank's Son "Feeling The Force" With Options Funded With Cash It Had Pledged To Protect

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

ASA Capital Management

ASA Capital Management is a boutique Research and Investment Advisory firm focusing on primary research in India. ASA provides bespoke research services to Institutional Clients with a focus on due diligence backed with primary research, Field Trips & Channel Checks.

Equity Bottom-Up

Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private companies. The sub-sectors covered include payment providers, e-commerce retailers,  social media platforms and consumer companies.
<ul>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> 's battles with Indian authorities as they ban PUBG over rising tensions between India and China. India was PUBG's largest market accounting for 29% of the application's total downloads.</li>
<li>
<a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a> trims its losses by 40% in India with a marginal increase in its revenues as it sees a growing user base in India but Google Pay and BharatPe are rising up as competition.</li>
<li>
<a href="https://www.smartkarma.com/entities/hennes-mauritz-ab" target="_blank" data-smartkarma-citation="entities:22380:1" rel="noopener">Hennes &amp; Mauritz Ab (HMB SS)</a> loses its India head, Janne Einola while the company works its way through strong headwinds.</li>
<li>After Jio Platforms is it Reliance Retail for <a href="https://www.smartkarma.com/entities/reliance-industries-ltd" target="_blank" data-smartkarma-citation="entities:198:1" rel="noopener">Reliance Industries (RIL IN)</a> ? Silver Lake Partners further plans to invest USD 1 billion in <a href="https://www.smartkarma.com/entities/reliance-industries-ltd" target="_blank" data-smartkarma-citation="entities:198:1" rel="noopener">Reliance Industries (RIL IN)</a> 's retail arm.</li>
</ul>

Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private companies. The sub-sectors covered include payment providers, e-commerce retailers,  social media platforms and consumer companies.


Tencent Holdings (700 HK) 's battles with Indian authorities as they ban PUBG over rising tensions between India and China. India was PUBG's largest market accounting for 29% of the application's total downloads.

Paytm (PAYTM IN) trims its losses by 40% in India with a marginal increase in its revenues as it sees a growing user base in India but Google Pay and BharatPe are rising up as competition.

Hennes &amp; Mauritz Ab (HMB SS) loses its India head, Janne Einola while the company works its way through strong headwinds.
After Jio Platforms is it Reliance Retail for Reliance Industries (RIL IN) ? Silver Lake Partners further plans to invest USD 1 billion in Reliance Industries (RIL IN) 's retail arm.


India Internet & Consumer Weekly | Tencent, PayTM, Reliance, H&M

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<div>Lots of interesting things stood out this week. Chief among them is that valuation has its limits...even for Apple and Tesla.</div><div><div class="content-highlight">Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</div></div>

Lots of interesting things stood out this week. Chief among them is that valuation has its limits...even for Apple and Tesla.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

TMT Weekly:  3 Things that Stood Out The Week of 9/4/​​​​2020

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<div class="content-highlight">
Our base case valuation of Big Hit Entertainment is EV of 4.1 trillion won, a market cap of 4.8 trillion won, and an implied price of 132,429 won per share (representing 2% lower than the high end of the IPO price range of 135,000 won per share). Given the low upside, we recommend investors to avoid this IPO.
If the IPO is priced at the low end of the IPO price range (105,000 won), then this IPO could have a reasonable upside (+20% upside). Otherwise, we think it would be better for global investors to allocate their precious capital in other more attractive companies.
</div>
Note the key assumptions in our valuation:
<ul>
<li>
EV/EBITDA multiple - We used a 30x EV/EBITDA (2020E) to value the company, which is a 30% premium to the average EV/EBITDA multiple of the comps.</li>
<li>
Sales growth - In 2020, the comps are expected to have an average sales decline of 11.9% YoY. We estimate Big Hit's sales to increase by 12.5% YoY. Overall, we would give an edge on the sales growth metric to Big Hit versus its peers given its much higher sales growth over a longer period.</li>
<li>
Operating profit growth - We have assumed the company's operating profit to increase by 17.1% YoY in 2020 and by 20.9% YoY in 2021.</li>
</ul>


Our base case valuation of Big Hit Entertainment is EV of 4.1 trillion won, a market cap of 4.8 trillion won, and an implied price of 132,429 won per share (representing 2% lower than the high end of the IPO price range of 135,000 won per share). Given the low upside, we recommend investors to avoid this IPO.
If the IPO is priced at the low end of the IPO price range (105,000 won), then this IPO could have a reasonable upside (+20% upside). Otherwise, we think it would be better for global investors to allocate their precious capital in other more attractive companies.

Note the key assumptions in our valuation:


EV/EBITDA multiple - We used a 30x EV/EBITDA (2020E) to value the company, which is a 30% premium to the average EV/EBITDA multiple of the comps.

Sales growth - In 2020, the comps are expected to have an average sales decline of 11.9% YoY. We estimate Big Hit's sales to increase by 12.5% YoY. Overall, we would give an edge on the sales growth metric to Big Hit versus its peers given its much higher sales growth over a longer period.

Operating profit growth - We have assumed the company's operating profit to increase by 17.1% YoY in 2020 and by 20.9% YoY in 2021.


Big Hit Entertainment IPO Valuation Analysis

<div>
Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private companies. The sub-sectors covered include payment providers, e-commerce retailers,  social media platforms and consumer companies. 
</div>
<div>
<ul>
<li>
<a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a> is assembling a possibly cheaper iPhone SE 2020 and opening its first online store</li>
<li>
<a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> faces strong headwinds as it is accused of unfair business practices and an illegal e-pharmacy venture</li>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> halts investments in India after the India-China feud - will this call for troublesome times for PayTM, Zomato and BigBasket?</li>
<li>
<a href="https://www.smartkarma.com/entities/walmart-inc" target="_blank" data-smartkarma-citation="entities:11134:1" rel="noopener">Walmart (WMT US)</a> owned PhonePe emerges as India's largest insure-tech distributor with over 230 million users.</li>
<li>
<a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> 's overseas sales for smartphones are back to pre-pandemic levels.</li>
<li>
<a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a> reiterates its significant influence over <a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a>, which is set for another loss this year.</li>
</ul>
</div>


Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private companies. The sub-sectors covered include payment providers, e-commerce retailers,  social media platforms and consumer companies. 




Apple Inc (AAPL US) is assembling a possibly cheaper iPhone SE 2020 and opening its first online store

Amazon.com Inc (AMZN US) faces strong headwinds as it is accused of unfair business practices and an illegal e-pharmacy venture

Alibaba Group (BABA US) halts investments in India after the India-China feud - will this call for troublesome times for PayTM, Zomato and BigBasket?

Walmart (WMT US) owned PhonePe emerges as India's largest insure-tech distributor with over 230 million users.

Xiaomi Corp (1810 HK) 's overseas sales for smartphones are back to pre-pandemic levels.

Ant Financial (1051260D CH) reiterates its significant influence over Paytm (PAYTM IN), which is set for another loss this year.



India Internet & Consumer Weekly | Apple, Amazon, PhonePe, Alibaba, Xiaomi, PayTM

United States

Alphabet, Inc. operates as a holding company. The Company, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Alphabet (GOOG US)

Softbank's Son "Feeling The Force" With Options Funded With Cash It Had Pledged To Protect

The market is eager to know what Softbank plans to do with a burgeoning war chest from bigger and bigger stock sales. The better question is why...

Vicki Bryan

India Internet & Consumer Weekly | Tencent, PayTM, Reliance, H&M

Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private...

Pranav Bhavsar

TMT Weekly: 3 Things that Stood Out The Week of 9/4/2020

Lots of interesting things so Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to...

Aaron Gabin

Big Hit Entertainment IPO Valuation Analysis

Our base case valuation of Big Hit Entertainment is EV of 4.1 trillion won, 2% lower than the high end of the IPO price range of 135,000 won per share

Douglas Kim

India Internet & Consumer Weekly | Apple, Amazon, PhonePe, Alibaba, Xiaomi, PayTM

Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private...

Pranav Bhavsar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Softbank's Son "Feeling The Force" With Options Funded With Cash It Had Pledged To Protect

The market is eager to know what Softbank plans to do with a burgeoning war chest from bigger and bigger stock sales. The better question is why...

Vicki Bryan

India Internet & Consumer Weekly | Tencent, PayTM, Reliance, H&M

Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private...

Pranav Bhavsar

TMT Weekly: 3 Things that Stood Out The Week of 9/4/​​​​2020

Lots of interesting things so Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to...

Aaron Gabin

Big Hit Entertainment IPO Valuation Analysis

Our base case valuation of Big Hit Entertainment is EV of 4.1 trillion won, 2% lower than the high end of the IPO price range of 135,000 won per share

Douglas Kim

India Internet & Consumer Weekly | Apple, Amazon, PhonePe, Alibaba, Xiaomi, PayTM

Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private...

Pranav Bhavsar

TMT Weekly: 3 Things that Stood Out The Week of 9/4/2020