CEO Message—SoftBank Group Report 2022

Key ideas

In a falling market, Son defends betting on long-term technology change while holding firm limits on debt and keeping enough cash for two years of bond redemptions.

1. 1

   Short term is hard to predict, long term less so

   Son writes that SoftBank's share price cannot easily be predicted for next week or next year, but that the long trend is a different matter. He walks through the internet industry's market value falling after 2000 and 2008 and then rising far beyond its earlier highs. He concludes that this longer view should make things less confusing, and says he is quite confident on a five- to ten-year frame.

2. 2

   Don't bet against technology's direction

   Son describes his business as supplying risk capital to companies at the front of technological change, and says some investors bet the other way. He uses the horse and the automobile to call that a losing position. He applies this to two concentrated bets: the Vision Funds and Arm.

3. 3

   Pair conviction with hard limits

   Son says belief in technology does not remove the worry that markets may keep falling, so SoftBank sets a ceiling on debt relative to its holdings and keeps cash to cover bond payments. He presents the two as one stance: a fixed vision alongside careful, selective investing.

4. 4

   Act before the limit is hit

   Son says falling markets pushed SoftBank's debt ratio up at the end of 2021 even though net debt had not grown. Seeing that the ratio could break its normal ceiling if the trend continued, he says the company invested more selectively and sold assets at what he calls the right time. He reports that the ratio then came down and the cash position grew.

5. 5

   Surviving the crash, despite failures

   Son recalls that SoftBank's share price collapsed after the internet bubble burst, yet the company survived and later grew. He acknowledges failures and embarrassments along the way, and says they did not change what he believes about where technology is going. He calls the current fall the third major correction and says he has no doubt the market will grow again.

In Masayoshi’s words

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