A week ago, analyst TD Cowen revealed that Microsoft had canceled leases "totalling a couple hundred MWs," with "at least two private data center operators across multiple US markets." The report also details how Microsoft "pulled back on converting negotiated and signed Statement[s] of Qualifications (SQQs)," which it added
According to The Information, SoftBank CEO Masayoshi Son is planning to borrow $16 billion to invest in AI, and may borrow another $8 billion next year. The following points are drawn from The Information’s reporting, and I give serious props to Juro Osawa and Cory Weinberg for their work.
SoftBank currently only has $31 billion in cash on its balance sheet as of December. Its net debt — which, despite what you think, doesn’t measure total debt but rather represents its cash minus any debt liabilities — stands at $29 billion… They plan to use the loan in question to finance part of their investment in OpenAI and their acquisition of chip design firm Ampere.
According to SoftBank’s reported assets, their holdings are worth about $219 billion (33.66 trillion yen), including stock in companies like Alibaba and ARM.
am I reading this correctly: softbank has $50 billion in debt, equal to about 25% of their total assets? is that… normal? these are genuine questions, not sure whether I’m misunderstanding something/whether this is actually usual
I think it’s more like $188,000 in stock, $31,000 in cash, annual pay of $45,000, and you currently have a $60,000 loan. the new loan would be an additional $16,000
The debt doesnt have to be unusual, esp when the projected profits on the debt is less than the money they pay in interest on it. So somebody with actual expertise about the context in which softbank operates and the specific nature of the debt should be able to tell of it is strange or not. Doubt we have that expertise here.
am I reading this correctly: softbank has $50 billion in debt, equal to about 25% of their total assets? is that… normal? these are genuine questions, not sure whether I’m misunderstanding something/whether this is actually usual
@sc_griffith
They made $45 billion in revenue in 2023 ($1.3 billion net), so I’m sure that is a factor.
If you owned $219,000 in stock and grossed $45,000 a year, and had $31,000 in cash, could you borrow $16,000?
I think it’s more like $188,000 in stock, $31,000 in cash, annual pay of $45,000, and you currently have a $60,000 loan. the new loan would be an additional $16,000
The debt doesnt have to be unusual, esp when the projected profits on the debt is less than the money they pay in interest on it. So somebody with actual expertise about the context in which softbank operates and the specific nature of the debt should be able to tell of it is strange or not. Doubt we have that expertise here.