Japanese tech firm SoftBank poured cold water on the Uber investment, saying there was no final agreement Photo: AFP
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SoftBank: No final agreement on Uber

4 Comments
By KAZUHIRO NOGI

Japanese tech giant SoftBank on Tuesday said there was "no final agreement" on an investment in Uber and warned it could pull out of a potential deal if the terms were unsatisfactory.

The statement came after Uber said it had entered an agreement with a consortium led by SoftBank and investment group Dragoneer on what it termed a "potential investment".

Uber unveiled the deal after former CEO Travis Kalanick and an influential investor reportedly buried the hatchet after a long feud.

But the Japanese firm voiced caution, saying: "While the SoftBank Group side is considering an investment in Uber, there is no final agreement at this stage.

"If conditions on share price and a minimum of shares are not satisfactory for the SoftBank Group side, there is a possibility the SoftBank Group may not make an investment," the statement added.

The Japanese group, founded by billionaire tycoon Masayoshi Son, expressed an interest several months ago in investing around $1 billion in Uber for a stake of at least 14 percent.

A deal would be positive for Uber, which is seeking to turn the page after recent repeated scandals, among them workplace sexual harassment allegations.

Meanwhile, SoftBank has been diversifying through investment for several years, and has ventured into sectors outside its core mobile technology business -- completing deals with the likes of French robotics firm Aldebaran and e-commerce with Chinese giant Alibaba.

It is sending tremors through the tech world with a its massive new Vision Fund -- a venture capital fund with $100 billion coffers intended for startups and expected to dominate the industry so thoroughly it is playfully referred to as a "gorilla".

SoftBank shares were down 0.75 percent on the news with Makoto Sengoku, market analyst at Tokai Tokyo Research Centre, saying that investors were underwhelmed with the news.

"It's good that SoftBank is always positive towards investing in fast-growing companies. But if you look at its earnings report, net profit was not growing even while operating profit was up," Sengoku told AFP.

"You cannot expect quick returns on your investment when net profit is not growing," added the analyst.

© 2017 AFP

©2017 GPlusMedia Inc.

4 Comments
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With all the storm clouds swirling around Uber across the world, taking a big risk to invest anything right now.

1 ( +1 / -0 )

Kaerimashita, I agree. If Uber or Softbank think the Japanese government is going to let Uber fully into Japan, they are fooling themselves, in my opinion. There are too many ojisan drivers who would vote against them in elections.

0 ( +1 / -1 )

Past 2 years a bubble in big cap tech stocks has been building rapidly especially in 2017. ETFs & retail investors have been allocating a disproportionate amount to the FAANG stocks and others like Softbank, etc. Though these big stocks have earnings, there PE ratios are too high based on current very high earnings and most optimistic projections that are not sustainable. Others like Uber, etc are raising tons of money with negative profits. Even tiny Singapore Razer is making its founder a billionaire, and the firm is making little profits. Soon something nasty is going to happen. Just some profit taking by big investors may cause a significant down move in the Tech area.

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 I agree. If Uber or Softbank think the Japanese government is going to let Uber fully into Japan, they are fooling themselves, in my opinion. doesnt mean squat, Masayoshi Son has very deep pockets and very large paperbags with many political donations to hand out. Just like Casinos were never though to come to Japan now they are. At the end of the day if Uber doesnt take taxi drivers jobs away , automated vehicles eventually will its only a matter of time.

0 ( +0 / -0 )

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