Softbank’s CEO prepares for ‘worst case scenario’

The CEO and founder of Softbank, Masayoshi Son said he is aggressively selling assets this year to prepare for a “worst case scenario” that could take place if the world shuts down in a second wave of coronavirus outbreaks.

During The New York Times’ Dealbook Conference, Son spoke virtually from Tokyo said he initially targeted about USD40 billion of asset sales this year but ended up selling off about USD80 billion of companies to give the company liquidity in case of a global emergency.

SoftBank sold semiconductor company ARM to Nvidia for USD40 billion and about USD20 billion of its stake in the new T-Mobile, which merged with Sprint earlier this year. If markets dip, SoftBank could use the money to buy undervalued assets, shore up its portfolio investments in the SoftBank Vision Fund, or buy back more stock.

“We’re just preparing for the worst case scenario, in the next two or three months, any disaster could happen,” Son said.

Though the CEO didn’t offer details on what “disaster” could be likely in the coming months, he alluded to Lehman Brothers’ 2008 collapse for how one event could be a catalyst for a broader meltdown.

“Anything can happen in this kind of situation,” Son said. “Of course, medical vaccine is coming. But who knows in the next two or three months?”

He also declined to comment on the prospect of taking SoftBank private. With advice from activist shareholder Elliott Management, SoftBank has aggressively bought back stock to take advantage of a market discount relative to the value of SoftBank’s many underlying assets. SoftBank’s Vision Fund owns stakes in more than 80 different technology companies.

The Softbank’s CEO also said he thought it was “sad” that the Trump administration has threated to shut down TikTok in the US over questionable national security threats. He said the largest US technology companies shouldn’t be broken up just because their market valuations are large. In recent months, SoftBank has invested in some of the largest US technology companies.

“Just being big and powerful is not necessarily an evil thing,” Son said.