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

To: william prideaux who wrote (5113)	5/19/2000 6:27:00 AM
From: Edwin S. Fujinaka	Read Replies (1) \| Respond to of 6020

Tokyo close down 2000 yen to 18,600 yen or $172.60 US. at around 6 am edt Frankfurt was also down 30 euros to 183 euros or $163.30 US. Reuters just in: biz.yahoo.com Friday May 19, 6:09 am Eastern Time Softbank lifts profit estimate; shares slump (UPDATE: Adds analyst quote in 3rd para, investment details in 4th para) By Miki Shimogori TOKYO, May 19 (Reuters) - Leading Japanese Internet investor Softbank Corp on Friday raised its earnings forecast for last business year, given better-than expected performance in the financing sector and a one-off profit from listing an affiliate. The revision came as the firm's shares resumed their steep slide, hit by shaky market sentiment towards Internet stocks and the vulnerability of the U.S. Nasdaq composite index. ``I don't think the news alone will turn investor sentiment around,'' said IBJ Securities analyst Soichiro Fukuda. ``Given the firm's emerging status as an Internet fund, the shares will remain sensitive to any wild swings in the U.S. Nasdaq.'' Softbank's hefty investments in global Web firms such as Internet portal Yahoo! (NasdaqNM:YHOO - news) and online broker ETrade Group (NasdaqNM:EGRP - news) brought hefty unrealised gains totalling 3.36 trillion yen ($31 billion) in listed firms alone. But these holdings have in turn made the firm vulnerable to wild swings in increasingly wobbly high-tech shares at home and in the United States. The Internet investor raised its group net profit estimate to 8.5 billion yen for the year ended in March, more than doubling its initial estimate of 3.5 billion yen, but that was less than a quarter of its profit the previous year. The firm will still remain in the red on a group current basis with an estimated 52 billion yen loss for last business year. Softbank said in a statement that operating profit at its financing unit exceeded its earlier estimate by 1.2 billion yen and the listing of Softbank affiliate Internet Research Institute on the Tokyo Stock Exchange's (TSE) new Mothers market in December returned a one-off profit of two billion yen. ``The upward revision itself is positive,'' said Kota Nakako, an analyst at UBS Warburg (Japan). ``The better profit was probably from the ETrade online broking operation.'' The latest revision could mean its financial operations -- most likely online trading unit E*Trade -- are starting to generate bigger profits, although the profit level is still too low to justify its market value of six trillion yen, said Nakako. Softbank closed Friday down by its daily limit of 2,000 yen or 9.71 percent at 18,600, more than 70 percent down from its February peak of 198,000 yen -- adjusted to 66,000 yen taking into account a subsequent three-for-one share split. CASH-FLOW CONCERNS Concerns have been growing as to whether the Internet investor could find a way of generating stable cash flow, besides selling part of its shareholdings in many Web start-ups. Also clouding sentiment towards Softbank is the apparent deadlock in a high-profile venture set up jointly with Tokyo Electric Power Co (TEPCO) and Microsoft Corp (NasdaqNM:MSFT - news) that had promised to offer Japan's cheapest Internet service. The startup, SpeedNet, announced on Friday that Yutaka Shindo had resigned as its president. It did not give any reason for the resignation, but media reports attributed it to dim prospects for the venture. Softbank, TEPCO and Microsoft each own 31 percent of SpeedNet, which was set up last September. It plans to use the fibre optic cable network of TEPCO, Japan's biggest utility, to provide the cheapest, fastest flat-rate Internet access in Japan. A TEPCO spokesman said SpeedNet will launch a test service from September to February and then decide when to start a full service -- a sharp retreat from its target of starting services this summer. The spokesman said TEPCO is still committed to the venture, but some media reports have speculated on conflicts between TEPCO and Softbank over SpeedNet's business plan, which could lead to a curtailment in operations or dissolution of the venture. ($ equals 109 yen)