Is SOFTBANK worth $413 per share or $165!?
On Friday's opening, Softbank shot up to a new high at
37,800 yen (~ $315) but suddenly was hit hard by bad news and
closed down 6%. The drop came after Warburg Dillon Read
downgraded the stock from 'hold' to 'sell' and set its target price
for the stock at 20,000 yen. Assuming a 121Y=$1 conversion, this
is ~ $165.
Contrast this to the stunning 195-page issued earlier by Lehman Bros.
when SOFTBANK was languishing under 14,000 yen (< $120),
giving SOFTBANK a "buy-1" rating. A "buy-1" is the highest
rating Lehman issues on any stock. Their target price was
41,600 (~ $343).
Since then (like I've mentioned before), SOFTBANK's stock chart has gone parabolic, peaking at around $315 barely taking a breath along the way. In the meantime, Lehman Bros. raised its price target from 41,600 (~ $343) to 50,000 (~ $413), reiterating its "buy-1" rating.
cbs.marketwatch.com
$413 per share?
OR
$165 per share?
It kinda reminds me of...........
Merrill Lynch's Jonathan Cohen
-> Amazon.com -> $50 per share
VS
CIBC Oppenheimer's Henry Blodget
-> Amazon.com -> $400 per share
This is so bloody outrageous. Other than the Cohen/Blodget nuttiness,
I've never seen such a stock analysis discrepancy in my entire life
(granted, i'm only 23 years old). Either Lehman Brothers or Warburg
Dillon Read will go down in the history books for making the worst call ever seen in equity markets, right next to Wit Capital's Jonathan
Cohen. My money is riding on WDR getting the pie in the face. If an
ADR comes within a year, this will be a guarantee. Speaking of Henry
Blodget, Smartmoney.com notes that "Lehman Brothers analyst Ravi Sarathy [has been]-- dubbed 'the Henry Blodget of Asia' by Softbank believers..."
I get the feeling WDR got their target price from doing a
technical analysis of SFTBF's chart. Their trailing averages
are skewed by the fact that there was (IMHO) a market
inefficiency of enormous magnitude that's been closing
as investors around the world have been made aware
of SOFTBANK and its unusually low valuation. Never again
will this stock see the $115 range it was in when Lehman
started coverage...
Try asking anyone on a message board "Do you think
YHOO or EGRP are good stocks?" They would "Yes!"
Then ask them, "Do you think these stocks are good bargains
at a 65% discount to market value?" Then they get really
quiet and confused. Well, most of that 65% has been wiped out
since Lehman's call ... I used to think of SOFTBANK as a
closed-end Internet-sector mutual fund trading at an
enormous discount to the values of its underlying holdings
due to a temporary supply/demand imbalance.
So what's SOFTBANK really worth? Anyone care to add their
guesses to the insanity?
- Netconductor, 1st buy attempt @ $130, finally long @ $202
netconductor.com
>>swisstrader wrote:
Steve: any further word on your valuation of Softbank?...seem to be differing views of
current valuations depending on whether you believe in Lehman or in Warburg, who
both just issued some pretty disparate views on the matter...thanks as always. |
