Re:SoftBank said to be trying to buy a big stake in Uber at ...
by simonrobb on Tuesday November 28, 2017 @01:54AM
(#15795022)
> exploiting Benchmark’s desire for an exit
Does that imply that they'll be buying Benchmark's stock, rather than employees'?
> SoftBank is getting extremely cheap debt at the moment
That sounds like some interesting background to the deal, please expand if you have more detail!
Re:SoftBank said to be trying to buy a big stake in Uber at ...
by linkregister on Wednesday November 29, 2017 @12:55AM
(#15804918)
SoftBank raised $93B in equity from investors. It also issued about $5B in bonds in July, as well as a large amount of loans from Japanese and East Asian banks (over $25B). The rates are extremely favorable despite the high risk associated with SoftBank's investments.
I'm bullish on SoftBank, but it's indisputable that it's gotten a hell of a deal. The upside for the banks is they get their principal + interest back. The downside for the banks is that they lent the cash at low-risk rates for high-risk assets.
They are structuring a deal that is advantageous to themselves, exploiting Benchmark’s desire for an exit so they can pay its investors their returns.
SoftBank is getting extremely cheap debt at the moment, so it makes sense to take advantage of shareholder turmoil to get valuable companies at a discount. With this purchase, SoftBank will have a hand in every significant ride sharing other than Lyft.