Elliott Management guns for SoftBank

MOST BOSSES dread Elliott Management, an American activist hedge fund whose tactics the traumatised chairman of a German company once described as “psycho-terror”. After news leaked on February 6th that Elliott had taken a 3% stake, worth over $2.5bn, in SoftBank Group, a Japanese telecoms-and-tech conglomerate, its flamboyant founder, Son Masayoshi, seemed less perturbed. As he presented SoftBank’s results on February 12th, Mr Son professed to be “thankful that such a distinguished investor has joined us as a friend”. He has reason to sound welcoming. SoftBank’s languishing share price leapt by 7% on the news of Elliott’s stake.

Elliott’s main focus at SoftBank is the Vision Fund, Mr Son’s $99bn tech-investment arm. Although SoftBank’s stake in the fund amounts to only 13% or so of the group’s total gross assets, the vehicle is causing a crisis of confidence. Last year its handling of WeWork led to the scuttling of the loss-making property firm’s listing, followed by a costly bail-out. That is when Elliott began to build its stake in earnest.

SoftBank’s earnings also disappointed. Overall the group eked out only $24m of operating profit. The Vision Fund lost $2bn in the last quarter, better than the $8.9bn loss in the previous three months but far worse than the market was expecting. This month, one Vision Fund...



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