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Technology Stocks : Softbank Group Corp

SFTBY 14.10

+1.4%

Jan 9 9:30 AM EST

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To: TobagoJack who wrote (179)	5/21/1999 11:49:00 PM
From: Edwin S. Fujinaka	Read Replies (1) of 6020

As things are unfolding, I see Softbank in the investment trust business (with active management overtones). Their primary strategy during this relatively early stage seems to be to invest in companies that look promising then tie the fortunes of their small company to one of the recognized major internet companies, primarily Yahoo/USA. Finally, they can take the small company public by just selling a fraction of the outstanding shares. Selling only a fraction keeps the float down and sets the stage for a large increase in unrealized capital gains. They can sell off pieces of the large unrealized capital gains to bolster profits or they can use some of the stock for acquisitions and mergers. Softbank can even affect the profits that one of these small companies shows by having one of the other companies in their stable throw business their way. It doesn't take a lot of money to make a major change in the earnings of some of these small internet companies (most of which are losing money). BTW, did you see that Softbank has invested $100 Million in Healtheon along with Microsoft who appears to be investing $250 Million (or maybe more). The funny thing is that the Healtheon/WebMD Company now has a market cap of around $25 Billion (so what's a paltry $100 Million between friends). Not bad for a combo where Healtheon reported a net loss of $54.1 Million on revenues of 48.8 Million in 1998. The other half of this combo, WebMD, showed a net loss of $31.7 Million on revenues of $616,000 (that's the correct number of zeros for revenue) over only 9 months of 1998. <G>. I guess there is going to be a race to see who can create the largest market cap for an IPO with the biggest loss in hand. I have a telecommunication stock that is showing rapid growth in revenue along with equally rapid growth in net losses and the stock price is going up. So the new paradigm is to show rapidly increasing revenue without regard to profits. We don't even have to joke about, "...but we make it up in volume." <G>.

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