MOST BOSSES dread Elliott Management, an American activist hedge fund whose tactics the traumatised chairman of a German target company once described as “psycho-terror”. After news leaked on February 6th that Elliott had taken a 3% stake, worth over $2.5bn, in SoftBank Group, a Japanese telecoms and technology conglomerate, its flamboyant founder, Masayoshi Son, seemed less perturbed.
The group’s results also disappointed. The Vision Fund lost $2bn in the last quarter, better than the $8.9bn loss in the previous three months but far worse than the market was expecting. Overall SoftBank eked out only $24m of operating profit. This month, one Vision Fund investment, an e-commerce startup from San Francisco called Brandless that received around $100m from Mr Son two years ago, became the first in the portfolio to fold.
A buy-back is likely after the Sprint deal is complete, says Chris Lane of Bernstein, a broker. SoftBank will probably add independent directors at its shareholder meeting in June; it currently has two. Mr Son may refrain from deploying a second, $108bn Vision Fund, after it became clear that the original’s troubles put off big institutional investors. SoftBank could instead use a small bridge fund to carry on investing, Mr Son said on February 12th.
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