DD? Softbank just throws gobs of money at companies with founders Masayoshi Son likes.

Softbank's "investment strategy" would've ended the company decades ago if it didn't buy a quarter of Alibaba for $20m, a share that would end up being worth over $100b a few years ago.

It appears that SoftBank also made a huge profit on Sprint. Although it was less than they initially expected and took much longer to exit.

https://www.wsj.com/articles/softbanks-boss-bet-22-billion-o...

Masayoshi Son is a gambler that invests more on gut instincts than fundamentals...most of his investments seem to fail, but a few have kept SoftBank going for so long, e.g, Alibaba, Sprint, etc.

Softbank vision fund was poorly designed. Because of how big it was, it needed to deploy a ton of money to create venture returns. Assuming a 10 year maturity and 5 years of investment period, they would need to deploy 20 billion per year into companies just to run the fund. if you invest in 100 companies then you basically need to write checks on the order of a few hundred million to billion.

*Implications:* They then pushed companies to expand way faster then was appropriate. This meant that companies made decisions that was not justified by the profitability, just because they needed to spend the money. Example would be that WeWork starts offices the best most expensive areas of manhattan and then serves them to customers at effectively a discount (fundamentally unprofitable decisions)

Basically, even solid companies would be forced to spray and pray money. Generally, speaking more money may bring greater velocity but you need to understand if the market is going to change at the same rate. For WeWork, the commercial office space market has leases typically for 5-10 years. Bottomline, there is not enough "liquidity" to absorb that quick an expansion.