Merrill's update on Softbank dated November 12th sites reason for update is not due to improved fundamentals (though fine fundamentals they are) for 9984, but "on increased flow of funds into the Japan internet sector resulting in across the board valuation expansion" (they use such polite words) and on "flow of information" - love Merrill. We must appear to be properly decorous in our basking under the Son.
A humorous look at 9984 would be ... western internet companies wanting to get in on the second largest but under-netted economy in the world pay 9984 in (a) ceding a brand stake ala E*Trade Japan, Yahoo Japan, Cisco Japan, etc allowing a free ride (b) hand over a bundle ala News Corp, Vivendi to 9984 management allowing a continuing management fee on assets under management (9984 1H results better than expected due to management fee (success fees)), allow 9984 to place bets by attracting yet more western internet companies into the battle for Japan and earn more fees and more capital gains, (c) letting 9984 to successively bring to market the invested successful and not-so-successful ventures (ZD, Trend Micro, Webvan, etc) and recognize gains and unload dogs, (d) set up markets (Nasdaq Japan/Europe) and financial operations (E*Trade and Morning Star Japan, banks, Insweb etc to better source capital and unload deals) and charge a commission and fees, improving exit chances for 9984 investment and benefiting E*Trade Japan's valuation (9984 increasing E*trade Japan capital to Yen 3 billion so that it can lead IPOs - simply magic).
Bigger, harder and generallay more impressive than Michael Milken's ever was (operation, that was), can buy and sell Milken 20 times before morning tea and all without Congressional oversight. Today Nippon Credit, tomorrow Citicorp. Tap that capital.
Merrill sites one possible negative about the recently announced attempt at 9984 (in combo with Ito-Yokado, Orix and Tokyo Marine to take over Nippon Credit Bank, and that is 9984 is not known for its turnaround skills. My comment is (1) 9984 used partners wisely and they will do the turnaround, (2) when it comes credit taking time, 9984 will be sighted for its brilliance at coopting partners to do a good turnaround job and will be then know for turning around Japanese institutions, thus enabling a whole new field of exploitation and endeavor, ala KKR.
Last week's Asian Venture Capital Conference was a success. The conference was a much more glitzy and well attended affair than previous iterations, attended by 400 suits and dresses, some of suitably high order (head of GE Equity - VC arm of GE Capital, Simom Murrey, Anson Chan, various stock excange heads from Malaysia, HK, Australia). MC-ed by TV personality. The air was electric, the speeches filled with disbelief (GE Equity, the VC arm of GE Capital, showed a slide indicating GE internet investments stood at 1.5 billion, when the slide was made 30 days ago, and now at 2.7 billion), the laughter genuine and the anticipation palpable. It was very much like a Southern American Christian church, folks dancing and arms waving. The afternoon session of the first day had only one topic, Internet. The rest of the sessions had a major theme, Internet.
The week before saw the Internet Expo World at the Convention Plaza. The hype was surreal - according to the financial types, i-net is not more important and significant development than telephone, television, train, airplane, or radio only, but is the most important single event since the two celled amoeba. That is important. The laughter was also genuine - ly enthusiastic and approving. I am not afraid that the interneto tsunami is gathering gale force and will soon drench us all in the tropically energizing elixer of life and raise us to heights unimaginable before. Speaking of heights, I hope you are still holding on to the 9984 rocket as we achieve orbital velocity for a ride to Pluto's outer moon.
I believe Japan's equity rise is only beginning. There is no law that states equity rise is limited to Nasdaq alone. Japan has all the ingredients - liquidity of history breaking bulk, techno-how, strengthening currency (Japan will not be hurt much as export is but one engine of the economy), vast restructuring obligatory, and even better than the US, namely a legal system favoring businesses.
On Ganesh's board is one of my earliest tomes on 9984, message 41 in March on this Board. Most of what I stated is coming true and Japan internet has one gate keeper and we own it.
Barron's is wrong about Japan just as it has been wrong about the US. Eventually Barron's will be right, but about the US first, as even a broken clock is correct twice a day. |
