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Japan’s risk-taking mogul makes another gamble

Masayoshi Son

Publication Date : 17-10-2012

 

Masayoshi Son, the founder and CEO of Japanese Internet and telecoms venture SoftBank Corp., is no stranger to playing the odds.

The Japanese ethnic Korean has the distinction of losing more money than any other individual in history, having seen some US$70 billion of his personal wealth evaporate during the dotcom crash of 2000.

For Son, though, risk continues to bring great reward: Son remains Japan’s second-richest person, worth over $7 billion.

In keeping with his reputation, Son, who recently described buying out a rival on an impulse, agreed Monday to buy a controlling stake in US telecom firm Nextel Sprint Corp. for $20.1 billion.

The deal between the heavily indebted telecom and a company with no foothold in the industry in the US is seen as risky by investors.

During talks leading up to the deal, SoftBank Corp’s stock price plunged more than 22 per cent, only to partially recover Tuesday. As one might expect, Son has seemed fully aware of the gamble, commenting at a press conference in Tokyo that the deal was not the “easy path”, but was necessary nonetheless.

Son’s record for picking winners will give him confidence that his gamble will pay off. His $20 million investment in China’s Alibaba Group Holding Ltd. is now estimated to be worth $10 billion, while Yahoo Japan, the largest stake of which is owned by SoftBank, goes from strength to strength, in contrast to its struggling US arm.

Son was also among those to recognise the potential of broadband early on through Yahoo BB, making a $1.3 billion bet to lease part of the network of Japan’s former state monopoly Nippon Telegraph and Telephone.

Within 18 months, Son’s venture was ahead of all of its rivals. Whether or not Son’s latest venture bears fruit, the Japanese tycoon will continue to be a man to watch in the coming years.

 

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