FAST FIVE: All In: Masayoshi Son Has Pledged 38% Of His SoftBank Stake For Loans From 19 Different Banks
All In: Masayoshi Son Has Pledged 38% Of His SoftBank Stake For Loans From 19 Different Banks Japan's richest man, Masayoshi Son, may be setting himself up for one of the most epic ponzi unwinds in history, and his juggling act between his personal fortune, SoftBank and SoftBank's Vision Fund is starting to paint a picture of him as Elon Musk on steroids. Just like Musk, the SoftBank founder has pledged a whopping 38% of his stake in the bank as collateral for personal loans from 19 different banks, including Credit Suisse and Julius Baer, according to Bloomberg.
It also leaves him in extreme risk of an unprecedented margin call should Softbank stock tumble (which it won't do for now, as the company is engaged in a furious buyback campaign as it piles ponzi upon ponzi).
Son has also leveraged his stake in the Vision Fund, which will amplify his losses or gains depending on how the fund's portfolio of unicorns and unicorn-wannabes, like Uber, fare.
WeWork's recent IPO blowup will undoubtedly impact the fund's 62% return that the Vision Fund reported through March. Robert Pozen, a senior lecturer with the MIT Sloan School of Management in Boston said: “There is a danger in companies where the founder calls all the shots regardless of whether there are loans.
And when founders borrow a lot against their shares, they might be more tempted to make riskier decisions.” As Josh Wolfe conveniently noted on Twitter this morning, the Vision Fund's track record and investor makeup has been anything but diversified.