SoftBank vs. Alibaba

Alibaba the chinese trading platform has currently a market cap of USD 396bn.

Softbank has still a 28% stake in Alibaba. Applying market metrics this should be worth USD 110bn.

BUT: Softbank itself has currently a market cap of USD 87bn. Besides the share in Alibaba they own 80% of Sprint telekom and the third largest mobile network in Japan.

I see a market ineffciency.

What you opinion folks: Short them both, Go long on Softbank or stay away from this Tech crap altogether?



you are missing about $134b in debt,

Thanks for the input!

I did calculate net USD103bn of this c40m is Sprint debt. Even if you attach no further value to the 80% share in Sprint after debt you end up with:

Assets: USD110bn in Alibaba, third largest mobile network in Japan (16 EBITDA cUSD3bn), and Yahoo Japan

Debt: USD63bn

I am willing to currently accept a negative strategic premium since I think Masayoshis SonĀ“s shopping spree and Vision Future Funds things will only break even in med term but still I arrive at Softbank being on relative terms undervalued and Alibaba bering on relative terms overvalued.

Greets Namxat