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Showing posts from September, 2021

Markets: Zoom's $15B Five9 Deal Hits A Hurdle

This July, Zoom (NASDAQ: ZM), the famous video-conferencing software company whose fortunes escalated during the pandemic, inked its first big acquisition with Five9 (NASDAQ: FIVN), a company that makes software to manage contact and customer support operations online.  The agreement was for Zoom to buy Five9 for $14.7bn paid fully with the acquirer's stock, but now that deal appears to be hitting a hurdle; Since the acquisition agreement, Zoom's stock has fallen by 20% and shrunk the value of its offer. In fact, Five9's shares now appear to be trading at a value above the value of Zoom's offer with the 20% drop taken into account, casting the deal in doubt. Unsurprisingly, an influential advisory firm known as  Institutional Shareholder Services (ISS) is  cautioning against the deal and advising Five9 shareholders to reject it. The firm presses that Five9 shareholders would be exchanging their stock for “a more volatile stock whose growth prospects have become le

Analysis: Dissecting GitLab's S-1 Filing

This week, one startup caught us off guard with a filing for an initial public offering that was unveiled late on Friday . It was GitLab , a popular code repository hosting service that's the main rival to GitHub .  GitLab recently unveiled its S-1 filing with the US Securities and Exchanges Commission (SEC) as is usual for companies taking the IPO route on the US markets. The S-1 filing provided great insight and detail into GitLab's business with information not publicly disclosed before, and we're here to dissect some of the most important information extracted from the bulky filing. Firstly, we'll be focusing on revenue and sales numbers which is of course the primary statistic for every business. Let's start with the fact GitLab has a solid business model bringing in solid sales and growing steadily, but the company is racking up significant losses.  Business Model : GitLab makes money by charging enterprise customers for paid features and integrations of its

Cashing Out: Carvana CEO's Dad Sells $3.6B Of Stock

Carvana is an online American used-car retailer that's grown fast and furiously since its founding barely nine years ago. For example, it now has a market cap of $57bn  that's 22x  the market cap the company IPOed at in 2017. Carvana's wild stock growth has been driven by wild business growth, such that the company posted $5.6bn in sales in 2020 compared to $859mn in 2017 when it went public. For this growth, the company has wildly rewarded investors that put in money early and more so the founding family that controls it - father and son duo Ernest Garcia II and Ernest Garcia III . As stocks enjoy great growth, it's normal that executives and founders with big stakes in a company would want to sell some shares and get cash to diversify their holdings, but selling too much can raise eyebrows and this is the case of Ernest Garcia II, the father of Garcia III who's the CEO of Carvana. It turns out that Garcia II has sold Carvana shares to the tune of $3.6bn over t

Alert: Coding Platform GitLab Files For US IPO

Catching us as a surprise late on Friday, GitLab , a popular coding platform and rival to GitHub,  has filed for an IPO in the US. GitLab is a popular code repository hosting service for software developers and is the 2nd-largest of its kind only beaten by GitHub.  While GitHub sold to Microsoft for $7.5bn three years ago, GitLab has remained independent and now is about to test the waters as a publicly-traded company. GitLab has unveiled its S-1 filing with the US SEC as is usual for companies looking to go public in the US and the S-1 document provides great insight into the GitLab's business with information not publicly disclosed before. Therefore, we'll be extracting some of the most important info from the bulky filing, mostly on its revenue stats. By the Numbers GitLab reported  $152mn in revenue in the fiscal year ended January 2021, compared to $81mn in the preceding year. In the first half of 2021, the company brought in $108mn in sales, compared to $64mn in t

Tobacco Giant Philip Morris Cleared To Buy Asthma Drugmaker Vectura

Irony abounds everywhere including in the business world. This time, it's such an irony that a major maker of tobacco products is forging ahead with its plan to buy a leading maker of drugs tackling asthma, a major respiratory disease for which tobacco smoke is identified as a major cause. The tobacco giant here is Philip Morris (NYSE: PM), the 2nd-biggest seller of cigarettes on Earth while the drugmaker is Vectura (LON: VEC), a British company whose specialty is making asthma inhalers. After winning a bidding war with the biggest offer of £1bn ( $1.4bn) , Philip Morris has gotten the majority vote from Vectura's shareholders (75% of them) to proceed with its acquisition, it announced . Before winning the vote from Vectura's shareholders, Philip Morris had a bidding war with the  Carlyle Group , an American private equity firm. Carlyle was the first to offer to buy Vectura before getting outbid by Philip Morris, then brought a higher offer than Philip Morris before getti

SoftBank Cuts Stake In Korean E-Commerce Giant Coupang

It's just another day where SoftBank is making a billion-dollar transaction. SoftBank is a Japanese tech conglomerate that's probably the biggest investor in the tech industry worldwide. Both directly or via its mammoth investment funds, it holds stakes in various tech companies and startups globally that are collectively worth tens of billions of $$$. This time, the transaction from SoftBank is that it's cut its stake in Coupang , a South Korean e-commerce giant in which it was an early investor. Coupang became publicly-traded this year and has thus given SoftBank a chance to convert paper shares into hard cash. SoftBank recently sold $1.7bn worth of Coupang stock on the open markets, a recent filing with the SEC shows. SVF Investments, a subsidiary of SoftBank incorporated in the UK, sold 57 million Coupang shares each for a price of $29.7, making $1.7bn in total. The transaction took place on Tuesday, the 14th of September. Despite cashing out $1.7bn, SoftBank still r

Markets: Microsoft Plans $60B Stock Buyback, Raises Dividend

In the stock markets this week, Microsoft the tech giant is among the biggest movers and shakers with actions very favorable to its shareholders. It's announced a very large stock buyback program as well as raised its quarterly dividend for shareholders. Microsoft has said it's approved a share buyback program of up to $60bn for an indefinite amount of time, meaning it can prolong for as much as possible but on the other hand get terminated at any date. The move came just on the heels of some US lawmakers proposing to enact a tax on corporate buybacks though it's not certain that both events are related. Before now, the last buyback program Microsoft announced was for $40bn in September 2019. In the two preceding years before that (2017-2019), the company spent $36bn on share buybacks.  Along with its latest buyback, Microsoft has also hiked its quarterly dividend by 6 cents or 11% over the previous level. Such a dividend hike and a bigger share buyback are like sugar

Deal: Goldman Sachs Buys Digital Lender GreenSky For $2.2B

It's another big deal in the digital lending space in the span of a few weeks. GreenSky (NASDAQ: GSKY), a specialty digital lender for home improvement services, is getting acquired by banking giant Goldman Sachs (NYSE: GS) for $2.2bn . Goldman has confirmed that it's acquiring GreenSky in an all-stock transaction worth $2.2bn. Obviously, it's a strategic acquisition for the banking giant to strengthen its position in the consumer lending market. Per deal terms, GreenSky shareholders will receive an equivalent of $12.11 in Goldman shares for each Class A common stock of GreenSky they hold. The deal values GreenSky at $2.2bn, inclusive of a $446mn adjustment tied to taxes. While big at face value, purchasing GreenSky for $2.2bn isn't a blockbuster deal but rather a lifesaver for a company that went public in 2018 at a value nearly double that figure. GreenSky was valued at $4bn with its IPO when it began trading at $23  but lately had been trading around $6 . Goldman

As Usual, Apple Unveils Array Of New Gadgets

In September of every year, there are many things to expect, but one of the most noteworthy expectations is usually the unveiling of new gadgets by Apple , the famous maker of the iPhone, iPod, iPad, i... For this year, Apple has unveiled an array of new gadgets, updates to its existing product lineup as seen most times. The gadgets include the iPhone 13 and iPhone 13 mini ;  iPhone 13 Pro and iPhone 13 Pro Max ;  9th generation iPad  and a new iPad Mini ; and the Apple Watch Series 7 .  iPhone 13 and iPhone 13 Mini As expected, the iPhone 13 series is a build-up on the iPhone 12 with upgrades on specs such as battery life, performance, and display. Its performance is upgraded thanks to Apple's new A15 Bionic chipset and its battery life upgraded by up to two and a half more hours per day than the iPhone 12, Apple says.  The new iPhone comes in 128GB storage at the entry-level, then upgraded levels of 256GB and 512GB. The main iPhone 13 retails for $799 while the mini version

Alert: Intuit Buys Mailchimp For $12B

In what marks one of the biggest tech acquisitions of this year and one of the biggest acquisitions of a bootstrapped startup on record, Mailchimp , the popular e-mail marketing and automation platform, has been bought by financial software company Intuit for $12bn (!). Intuit (NASDAQ: INTU) has confirmed that it's buying Mailchimp to make it its fifth major product suite. The other four are TurboTax for tax filing, QuickBooks accounting software, budgeting app Mint , and credit scoring service Credit Karma  that Intuit bought last year for $7bn . Mailchimp is a super-success story in many ways thanks to this acquisition. It's rare that a tech company completely bootstrapped from its start is selling for $12bn, it's actually unheard of. It marks off a sweet exit for a company founded two decades ago and is still controlled by its two founders; Ben Chestnut and Dan Kurzius . The $12bn deal is split into cash and stock; first, $500mn of restricted stock units for Mailchim

Markets: Coinbase Bumps Up Bond Offering To $1.5B

Coinbase is the biggest cryptocurrency exchange in America and the foremost crypto company in the country. It went public this year as the first major crypto company to test the US public markets, having mixed results so far. It currently has a $51bn market cap, though down from its $91bn peak. As it is, Coinbase has judged it very fit to tap the bond markets as a public company to raise money for its operations. It's set out to raise $1.5bn in its first-ever bond offering, up 20% from the $1.25bn it previously planned to raise.  The bonds Coinbase is offering are in two tranches, one due for redemption by 2028 and the other by 2031. In the currently raging bond markets, it appears that Coinbase won't have issues raising the $1.5bn it wants. That a company like Coinbase is embarking on a bond offering signals that investors are becoming more receptive towards cryptocurrency companies. The crypto sphere is a fairly new one that's been shunned by legacy investors and the

Moves: Yahoo, Yes, Names A New CEO

Let's tell you a short story; in the online world, there was a time wherein a company named Yahoo ruled on the earth. It was a giant in its right, having the most market share of search and web portals before a newer incumbent named Google encroached on its turf and displaced it to become king.  The above story is a true one, but while it's written like an ancient tale, the timeline where it happened wasn't even that long ago, it was during the late 1990s to the early 2000s when the internet was still a fairly new thing Straight to the point, a once-dominant Yahoo was displaced by Google and thus is now a shadow of what it used to be. But, even the shadow of a displaced giant has some value such that the remnant of Yahoo combined with the remnant of AOL , another fallen tech giant, recently sold to a private equity firm for $5bn . Apollo   Global Management was the private equity buyer.  As Apollo has just completed acquiring Yahoo from its previous owner, Verizon Commun

Law: Wells Fargo Fined $250M For Loan Fraud

The name Wells Fargo should ring a bell to many. It's that famous bank or let's say infamous bank that's among the biggest in America. It's famous for serving over 70 million customers in the country yet infamous for a history of dodgy practices that have led to billions of dollars in collective fines imposed by the government. After paying fines amounting to over $7bn from 2016 to date, it appears that Wells Fargo is not even done getting caught for violations and paying big penalties. This time around, the bank has been ordered to pay $250mn  by the US Office of the Comptroller of the Currency (OCC) for dodgy loan practices. The OCC levied the latest fine on Wells Fargo after concluding that the bank didn't adequately comply with an order the agency gave it back in 2018 to repay customers who were charged fees deemed excessive and improper.  The improper fees trace back to a 2018 case where Wells Fargo admitted that it had fraudulently charged people with car

Markets: Investor Dan Loeb Wins Big From Online Lender Upstart

Certain times, there are investments you hear of that brought about astounding profits and you go thinking "why didn't I think of that?", what if I bought BTC earlier on...what if I bought Zoom stock before the pandemic..but here's the thing, you may have bought something else that crashed to the ground and lost you good money. But nonetheless, there are times where see certain investment windfalls that just deserve to be highlighted and we're here with one today. It's that of Dan Loeb , a well-known hedge fund honco who runs Third Point Management . His bet on a certain early-stage tech startup has proved to be savvy and brought in big profit. Loeb invested in Upstart , an online lender that went public last year, earlier on. Precisely, his fund invested a total of $90mn for shares now worth  over   40x that, moreover in the span of six short years.  Loeb's Third Point first invested in Upstart in 2015 when the online lender was still an early stage star

Markets: Southeast Asian Tech Giant Sea Files To Raise $6.3B

Sea Ltd (NYSE: SE) , the biggest tech giant in Southeast Asia, is about to kickstart the biggest fundraising drive ever seen for a tech company from the region. It's filed to raise a huge amount of money by selling equity and bonds on the public markets - $6.3bn to be precise. Sea is a Singapore-based tech conglomerate and holding company for three major businesses which are  Shopee , an e-commerce platform; Garena , a mobile games developer; and SeaMoney , a payments processing platform. With $4.4bn in 2020 revenue, Sea is Southeast Asia's biggest tech company and yet still growing solidly. Over the past few years, Sea has experienced growth that can only be described as astounding. For example, it grew annual sales from $1bn in 2018 to $2.9bn in 2019 to $4.4bn in 2020 . That growth has made the company an investor favorite with a current market cap of $174bn , the biggest of any company in Southeast Asia. Capitalizing on the investor fanfare, Sea has filed to raise a who

Markets: Activist Fund Elliott Goes After Citrix, Again

Elliott Management is a fierce activist hedge fund that no CEO wants to pick a fight with. In its history, it's waged activist campaigns against the leadership of many publicly-traded companies and picked up a significant number of victories to its name. In fact, it's also done so with nation-states, famously once  seizing a ship owned by the Argentine government to pressure the country to redeem its bonds. In its latest activist campaign, Elliott appears to be pressing upon  Citrix (NASDAQ: CTXS), a company that makes software tools used for remote desktop access to servers hosted online. A legacy software company from the 1990s, Citrix like many of its kind has had issues transitioning towards a subscription-based business rather than specified contracts and from on-site computing towards cloud computing. Now, Elliott and Citrix aren't new to each other. The activist fund began pressing the company back in 2015 when it bought a 7% stake , demanding that it made changes

Deal: PayPal Buys Japanese BNPL Startup Paidy For $2.7B

Back again with another big acquisition, it appears that the payments processing giant PayPal is keen on growing its business by acquiring smaller players. This time, the company's acquisition seems out-of-the-norm, not in the traditional payments processing space but in the emerging field of "buy now, pay later (BNPL)" and then in Japan . PayPal has agreed to buy Paidy , a Japanese BNPL startup, for the sum of $2.7bn in cash. It marks one of the biggest acquisitions of a Japanese tech startup in recent history, elevating the country's status in the tech startup scene. Paidy is a popular 'buy now, pay later' service in Japan, facilitating loans for consumers to shop online and then pay back in installments, usually with little or no interest and no late fees. Without interest or late fees, BNPL startups like Paidy make money by charging online retailers for using its service, concocting the function of traditional credit cards but with a different business

Deal: SoftBank Swaps T-Mobile Shares For Deutsche Telekom

SoftBank Group , the ever deal-making Japanese tech conglomerate, is back again with another multi-billion-dollar deal. This time, it's the company swapping shares in an American telecoms giant with that of a German counterpart. SoftBank is swapping some shares in T-Mobile US (NASDAQ: TMUS) for that of  Deutsche Telekom (DT)  (ETR: DTE) in Germany. The swap will give SoftBank a 4.5% stake in Deutsche Telekom that's worth about $5bn at the agreed-upon price. Afterward, it'll retain a 3.3% stake in T-Mobile US. As per  official deal terms , Deutsche Telekom (DT) will get 45 million existing T-Mobile US shares from SoftBank in exchange for issuing 225 million new shares of itself to the Japanese conglomerate for €20 each, a 12% premium to their current price on the public markets. Additionally, Deutsche Telekom has laid out plans to invest some $2.4bn  of expected proceeds from the just-announced  sale of its T-Mobile Netherlands franchise to buy 20 million more T-Mobil

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Alert: Coding Platform GitLab Files For US IPO

Catching us as a surprise late on Friday, GitLab , a popular coding platform and rival to GitHub,  has filed for an IPO in the US. GitLab is a popular code repository hosting service for software developers and is the 2nd-largest of its kind only beaten by GitHub.  While GitHub sold to Microsoft for $7.5bn three years ago, GitLab has remained independent and now is about to test the waters as a publicly-traded company. GitLab has unveiled its S-1 filing with the US SEC as is usual for companies looking to go public in the US and the S-1 document provides great insight into the GitLab's business with information not publicly disclosed before. Therefore, we'll be extracting some of the most important info from the bulky filing, mostly on its revenue stats. By the Numbers GitLab reported  $152mn in revenue in the fiscal year ended January 2021, compared to $81mn in the preceding year. In the first half of 2021, the company brought in $108mn in sales, compared to $64mn in t

Analysis: Dissecting GitLab's S-1 Filing

This week, one startup caught us off guard with a filing for an initial public offering that was unveiled late on Friday . It was GitLab , a popular code repository hosting service that's the main rival to GitHub .  GitLab recently unveiled its S-1 filing with the US Securities and Exchanges Commission (SEC) as is usual for companies taking the IPO route on the US markets. The S-1 filing provided great insight and detail into GitLab's business with information not publicly disclosed before, and we're here to dissect some of the most important information extracted from the bulky filing. Firstly, we'll be focusing on revenue and sales numbers which is of course the primary statistic for every business. Let's start with the fact GitLab has a solid business model bringing in solid sales and growing steadily, but the company is racking up significant losses.  Business Model : GitLab makes money by charging enterprise customers for paid features and integrations of its

Alert: Intuit Buys Mailchimp For $12B

In what marks one of the biggest tech acquisitions of this year and one of the biggest acquisitions of a bootstrapped startup on record, Mailchimp , the popular e-mail marketing and automation platform, has been bought by financial software company Intuit for $12bn (!). Intuit (NASDAQ: INTU) has confirmed that it's buying Mailchimp to make it its fifth major product suite. The other four are TurboTax for tax filing, QuickBooks accounting software, budgeting app Mint , and credit scoring service Credit Karma  that Intuit bought last year for $7bn . Mailchimp is a super-success story in many ways thanks to this acquisition. It's rare that a tech company completely bootstrapped from its start is selling for $12bn, it's actually unheard of. It marks off a sweet exit for a company founded two decades ago and is still controlled by its two founders; Ben Chestnut and Dan Kurzius . The $12bn deal is split into cash and stock; first, $500mn of restricted stock units for Mailchim

As Usual, Apple Unveils Array Of New Gadgets

In September of every year, there are many things to expect, but one of the most noteworthy expectations is usually the unveiling of new gadgets by Apple , the famous maker of the iPhone, iPod, iPad, i... For this year, Apple has unveiled an array of new gadgets, updates to its existing product lineup as seen most times. The gadgets include the iPhone 13 and iPhone 13 mini ;  iPhone 13 Pro and iPhone 13 Pro Max ;  9th generation iPad  and a new iPad Mini ; and the Apple Watch Series 7 .  iPhone 13 and iPhone 13 Mini As expected, the iPhone 13 series is a build-up on the iPhone 12 with upgrades on specs such as battery life, performance, and display. Its performance is upgraded thanks to Apple's new A15 Bionic chipset and its battery life upgraded by up to two and a half more hours per day than the iPhone 12, Apple says.  The new iPhone comes in 128GB storage at the entry-level, then upgraded levels of 256GB and 512GB. The main iPhone 13 retails for $799 while the mini version

Tobacco Giant Philip Morris Cleared To Buy Asthma Drugmaker Vectura

Irony abounds everywhere including in the business world. This time, it's such an irony that a major maker of tobacco products is forging ahead with its plan to buy a leading maker of drugs tackling asthma, a major respiratory disease for which tobacco smoke is identified as a major cause. The tobacco giant here is Philip Morris (NYSE: PM), the 2nd-biggest seller of cigarettes on Earth while the drugmaker is Vectura (LON: VEC), a British company whose specialty is making asthma inhalers. After winning a bidding war with the biggest offer of £1bn ( $1.4bn) , Philip Morris has gotten the majority vote from Vectura's shareholders (75% of them) to proceed with its acquisition, it announced . Before winning the vote from Vectura's shareholders, Philip Morris had a bidding war with the  Carlyle Group , an American private equity firm. Carlyle was the first to offer to buy Vectura before getting outbid by Philip Morris, then brought a higher offer than Philip Morris before getti

Cashing Out: Carvana CEO's Dad Sells $3.6B Of Stock

Carvana is an online American used-car retailer that's grown fast and furiously since its founding barely nine years ago. For example, it now has a market cap of $57bn  that's 22x  the market cap the company IPOed at in 2017. Carvana's wild stock growth has been driven by wild business growth, such that the company posted $5.6bn in sales in 2020 compared to $859mn in 2017 when it went public. For this growth, the company has wildly rewarded investors that put in money early and more so the founding family that controls it - father and son duo Ernest Garcia II and Ernest Garcia III . As stocks enjoy great growth, it's normal that executives and founders with big stakes in a company would want to sell some shares and get cash to diversify their holdings, but selling too much can raise eyebrows and this is the case of Ernest Garcia II, the father of Garcia III who's the CEO of Carvana. It turns out that Garcia II has sold Carvana shares to the tune of $3.6bn over t

Markets: Microsoft Plans $60B Stock Buyback, Raises Dividend

In the stock markets this week, Microsoft the tech giant is among the biggest movers and shakers with actions very favorable to its shareholders. It's announced a very large stock buyback program as well as raised its quarterly dividend for shareholders. Microsoft has said it's approved a share buyback program of up to $60bn for an indefinite amount of time, meaning it can prolong for as much as possible but on the other hand get terminated at any date. The move came just on the heels of some US lawmakers proposing to enact a tax on corporate buybacks though it's not certain that both events are related. Before now, the last buyback program Microsoft announced was for $40bn in September 2019. In the two preceding years before that (2017-2019), the company spent $36bn on share buybacks.  Along with its latest buyback, Microsoft has also hiked its quarterly dividend by 6 cents or 11% over the previous level. Such a dividend hike and a bigger share buyback are like sugar

Markets: Zoom's $15B Five9 Deal Hits A Hurdle

This July, Zoom (NASDAQ: ZM), the famous video-conferencing software company whose fortunes escalated during the pandemic, inked its first big acquisition with Five9 (NASDAQ: FIVN), a company that makes software to manage contact and customer support operations online.  The agreement was for Zoom to buy Five9 for $14.7bn paid fully with the acquirer's stock, but now that deal appears to be hitting a hurdle; Since the acquisition agreement, Zoom's stock has fallen by 20% and shrunk the value of its offer. In fact, Five9's shares now appear to be trading at a value above the value of Zoom's offer with the 20% drop taken into account, casting the deal in doubt. Unsurprisingly, an influential advisory firm known as  Institutional Shareholder Services (ISS) is  cautioning against the deal and advising Five9 shareholders to reject it. The firm presses that Five9 shareholders would be exchanging their stock for “a more volatile stock whose growth prospects have become le

Markets: Coinbase Bumps Up Bond Offering To $1.5B

Coinbase is the biggest cryptocurrency exchange in America and the foremost crypto company in the country. It went public this year as the first major crypto company to test the US public markets, having mixed results so far. It currently has a $51bn market cap, though down from its $91bn peak. As it is, Coinbase has judged it very fit to tap the bond markets as a public company to raise money for its operations. It's set out to raise $1.5bn in its first-ever bond offering, up 20% from the $1.25bn it previously planned to raise.  The bonds Coinbase is offering are in two tranches, one due for redemption by 2028 and the other by 2031. In the currently raging bond markets, it appears that Coinbase won't have issues raising the $1.5bn it wants. That a company like Coinbase is embarking on a bond offering signals that investors are becoming more receptive towards cryptocurrency companies. The crypto sphere is a fairly new one that's been shunned by legacy investors and the

SoftBank Cuts Stake In Korean E-Commerce Giant Coupang

It's just another day where SoftBank is making a billion-dollar transaction. SoftBank is a Japanese tech conglomerate that's probably the biggest investor in the tech industry worldwide. Both directly or via its mammoth investment funds, it holds stakes in various tech companies and startups globally that are collectively worth tens of billions of $$$. This time, the transaction from SoftBank is that it's cut its stake in Coupang , a South Korean e-commerce giant in which it was an early investor. Coupang became publicly-traded this year and has thus given SoftBank a chance to convert paper shares into hard cash. SoftBank recently sold $1.7bn worth of Coupang stock on the open markets, a recent filing with the SEC shows. SVF Investments, a subsidiary of SoftBank incorporated in the UK, sold 57 million Coupang shares each for a price of $29.7, making $1.7bn in total. The transaction took place on Tuesday, the 14th of September. Despite cashing out $1.7bn, SoftBank still r