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Technology Stocks : Softbank Group Corp -- Ignore unavailable to you. Want to Upgrade?

To: swisstrader who wrote (4505)	3/18/2000 3:37:00 AM
From: Edwin S. Fujinaka	Read Replies (1) \| Respond to of 6018

Probably only Son's personal accountant knows the amount of the losses that the Economist writer suggested were involved in the portion of Ziff Davis that was in Son's MAC Account for a while. It doesn't seem likely that it was a large amount since ZD was an ongoing enterprise with a long financial history. I suppose there could have been some capital manipulation, but allegations like that can be made of almost any individual who controls such a large share of a Company's stock in his personal account and who has such total control over the Company itself. This sort of conjecture by a supposedly technical journal like the Economist seems rather inappropriate without adequate back up and proof.

To: swisstrader who wrote (4505)	3/22/2000 1:55:00 AM
From: ghengis2	Read Replies (2) \| Respond to of 6018

Re MAC losses: more venom from The Economist BUSINESS Softbank unziffed The Internet Search archive A cloud over Son IF YOU want a sense of how badly Softbank needed cash, and of the lengths it will go to get it, the place to look is America. Masayoshi Son has a reputation as a visionary. If Ziff-Davis is anything to go by, he is a shrewd financial operator too. One trick was to shuffle $1.5 billion in debt from Softbank?s balance sheet on to Ziff-Davis?s when the American company floated. This was more than Ziff-Davis could support from its operating profits. Within eight months of the flotation, Ziff-Davis had to renegotiate covenants on its bank loans. Even so, Ziff-Davis last year announced a ?restructuring? that involves piecemeal disposals of most of its businesses?with losses of some $1.25 billion. Mr Son also had a cavalier attitude to corporate governance. When Ziff-Davis was bought in 1996, some of its businesses went not to Softbank, but to MAC, the private firm through which Mr Son then held most of his stake in Softbank. These businesses were mostly in their ?development? phase (ie, loss-making). As MAC owned the businesses, their losses were hidden from Softbank?s shareholders. In 1998 Mr Son sold them back to Ziff-Davis for precisely what he had paid for them?odd, given the volatile values of high-tech business. Most of Ziff-Davis?s subsidiaries have fallen dramatically in value since their flotation nearly two years ago. Mr Son has found it hard to kick his habit of creative accounting. In 1999, after MAC had been merged into Softbank for the sake of ?corporate transparency and disclosure?, Ziff-Davis bought ZDTV, a cable-television company and integrated website, from MAC Holdings (America), another private company controlled by Mr Son. Yet ZDTV had been run as if it was one of Ziff-Davis?s subsidiaries. Because legally it was not, its trading losses did not appear in either Ziff-Davis?s or Softbank?s accounts. These losses amounted to $47.5m in the year to December 1998, compared with Ziff-Davis?s operating profits of $31.1m and Softbank?s operating profits of ¾12.1 billion ($100m). Investors in Softbank would do well to remember two things. First, The Economist has discovered the full extent of dealings between Mr Son?s private empire, Softbank and Ziff-Davis only because of the disclosure rules set by American stockmarket regulators. These are more stringent than the rules in Japan. Second, although MAC no longer exists, the financial engineers who dreamt up the structure still work for Softbank.