Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

Nvidia shares are up 61% since it announced the acquisition of ARM.  That is great news for <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> , which has seen the pro rata value of its potential NVDA shares soar $11bn (87% economic stake) with almost half that gain coming in the last three months. That stands in stark contrast to the SBG share price (-37% since 10 May) or the value of key assets like Alibaba (-12%) or Vision Fund (-2%). In fact, the absolute return for SBG shareholders is now better than what Coupang produced whilst the unrealized gains alone are worth more than Vision Fund’s China ADR portfolio. The downside is Softbank could lose that if regulatory approvals stumble and as China is the likely flashpoint for that, recent worries on China exposure could get even worse.

Nvidia shares are up 61% since it announced the acquisition of ARM.  That is great news for Softbank Group (9984 JP) , which has seen the pro rata value of its potential NVDA shares soar $11bn (87% economic stake) with almost half that gain coming in the last three months. That stands in stark contrast to the SBG share price (-37% since 10 May) or the value of key assets like Alibaba (-12%) or Vision Fund (-2%). In fact, the absolute return for SBG shareholders is now better than what Coupang produced whilst the unrealized gains alone are worth more than Vision Fund’s China ADR portfolio. The downside is Softbank could lose that if regulatory approvals stumble and as China is the likely flashpoint for that, recent worries on China exposure could get even worse.

Softbank Group - ARM Optionality and Exposure Are on the Rise

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.

We remain short Intel. The growth and margin picture is still deteriorating. We don’t think Pat Gelsinger is capable of turning this ship around…and we think the proposed acquisition of Global Foundries may accelerate Intel’s demise.<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>

We remain short Intel. The growth and margin picture is still deteriorating. We don’t think Pat Gelsinger is capable of turning this ship around…and we think the proposed acquisition of Global Foundries may accelerate Intel’s demise.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.

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Intel's rumored bid to acquire GOLBALFOUNDRIES is a good move to achieve the company's current goals, but as this analyst has discussed in <a href="https://www.smartkarma.com/insights/intel-reveals-plan-to-restore-process-leadership" target="_blank" rel="noopener">a prior Insight</a>, those goals are very difficult to rationalize.

Intel's rumored bid to acquire GOLBALFOUNDRIES is a good move to achieve the company's current goals, but as this analyst has discussed in a prior Insight, those goals are very difficult to rationalize.

Figuring Out the Intel/GLOBALFOUNDRIES Deal

Intel recently announced a reorganization, splitting up one group and merging three others, while also creating a new software organization.  The intent is to better align the company with the markets it serves.  All of this has been achieved with only one notable executive departure, and one new hire.

Intel recently announced a reorganization, splitting up one group and merging three others, while also creating a new software organization.  The intent is to better align the company with the markets it serves.  All of this has been achieved with only one notable executive departure, and one new hire.

There has been an uptick in Softbank news this week as we enter the last stretch of the quarter. On one hand there has been good news as Vision Fund 2’s public portfolio expands, thanks to a successful listing for Zhangmen, two coincident IPO investments and an IPO filing for investee Dingdong Maicai. But the long-expected bankruptcy of Katerra also means another $2bn of Vision Fund value has been wiped off the board so what markets are hearing on Softbank remains decidedly mixed. We have updated our Softbank tables including public portfolio valuations, the holding company discount, and the IPO pipeline.

There has been an uptick in Softbank news this week as we enter the last stretch of the quarter. On one hand there has been good news as Vision Fund 2’s public portfolio expands, thanks to a successful listing for Zhangmen, two coincident IPO investments and an IPO filing for investee Dingdong Maicai. But the long-expected bankruptcy of Katerra also means another $2bn of Vision Fund value has been wiped off the board so what markets are hearing on Softbank remains decidedly mixed. We have updated our Softbank tables including public portfolio valuations, the holding company discount, and the IPO pipeline.  

Softbank Group - Shares Drift as Discount Settles in 40% Range

United States

NVIDIA Corporation designs, develops, and markets three dimensional (3D) graphics processors and related software.  The Company's products provide interactive 3D graphics to the mainstream personal computer market.

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NVIDIA Corp (NVDA US)

Softbank Group - ARM Optionality and Exposure Are on the Rise

NVDA is +61% since it announced the ARM acquisition. That's great for Softbank, which has seen pro rata value soar $11bn. But it also means...

Kirk Boodry

Intel 2Q21: Where Do Margins Go?

Intel's growth and margin picture is still deteriorating. We think the proposed acquisition of Global Foundries may accelerate Intel’s demise.

Aaron Gabin

Figuring Out the Intel/GLOBALFOUNDRIES Deal

Should Intel acquire GLOBALFOUNDRIES as has been rumored? While this would help Intel to achieve its stated goals more rapidly, those goals seem...

Jim Handy

Intel Re-Shuffles Top Management Tier

Intel announced a reorganization this week. This Insight helps readers to understand the CEO's motivation for these changes.

Jim Handy

Softbank Group - Shares Drift as Discount Settles in 40% Range

SBG reports incremental progress on its Vision Fund liquidity plans but c. $9bn in public VF valuation losses is a headwind. Shares now trade in...

Kirk Boodry

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