Softbank Corp (SFTBY)

[mick]

january 20, 2016, 10:47 P.M. ET/ SFTBF
Thanks Sprint: SoftBank Is Now Worth Less Than Its Alibaba Stake



http://blogs.barrons.com/asiastocks/2016/01/20/thanks-sprint-softbank-is-now-worth-less-than-its-alibaba-stake/?mod=yahoobarrons&ru=yahoo

By Shuli Ren

Sprint (S) is ruining its parent SoftBank‘s (9984.Japan/SFTBY) valuation.

SoftBank has tumbled 15% since media reports that Sprint would cut its tower network to generate $1 billion cost savings, possibly putting its network quality at peril. Wall Street analysts have questioned whether this purported plan makes sense at all.

Neither SoftBank nor Sprint have commented on the report.

According to Citi Research, this sounds out of character:

The last comments from Sprint were at our IMT conference in early January, at which CFO Tarek Robbiati remarked on the importance of churn reduction and improvement in network performance but did not give the impression that Sprint would meaningfully shrink the size of its tower network.

But damage has been done. Citi estimates that SoftBank’s Alibaba (BABA) holdings alone is worth 5,700 yen as of January 19 (Alibaba fell another 2% overnight) and SoftBank is now trading at 4,869 yen, or a good 12% discount.

So the rest of SoftBank is worthless? SoftBank jumped 3.8% while the Nikkei gained 1.6% this morning. See also my January 14 blog “Time To Bottom Fish SoftBank“.

UPDATE: SoftBank participated in the Nikkei’s late-afternoon sell-off, closing the day another 3.2% lower.