Similar companies, different issues Amazon is going to suffer from all of the same problems that Alibaba has but is in a better position to mitigate the logistics impact. However, its demand picture is far less clear. With social distancing, isolation and closures becoming the norm, the role of e-commerce is going to become extremely important. Alibaba In China, Alibaba...
The biggest risk is a credit crunch. For the next few months, cash is going to be the single most important factor as only cash will allow affected businesses to survive the very sharp (but temporary) decline in their revenues. The knock-on effect of a wave of loan defaults and bankruptcies could be very serious as Western economies are more...
No IPO but no chapter 11 either. The perfect storm of a large ramp in spending just as the Coronavirus kills its bookings are going to prevent any IPO this year, but Airbnb is a proper company and should comfortably survive this shock. Data from Airdna (see here) is showing a severe decline in weekly Airbnb revenue and in cities...
Magic Leap will be very lucky to sell for $1bn. Magic Leap is exploring its strategic alternatives which in English means that it has run out of money and is struggling to raise more. This includes a sale where the company seems to be hoping to get around $10bn. This combined with its history leads me to think that no...
4 of the G7 could follow China & Italy. As with most infections, it is not the pathogen that does most of the damage but the reaction to it. This is proving to be the case with Covid-19 as it is the efforts to contain it that have serious (but short-lived) economic implications as opposed to the deadliness of the...
GeForce Now is in real trouble. It appears that streaming games is harder than it looks as Nvidia’s service, like Google Stadia, is in the kind of trouble that could threaten its very existence. Nvidia managed to avoid most of the mistakes that Google made when it launched Stadia by announcing a very different proposition as well as not hyping...
Software is not a refuge. Faced with the complete collapse of its smartphone business outside of China, Huawei is trying to develop its own ecosystem but without any users, this is a forlorn hope. Android devices that ship outside of China are almost entirely Google Ecosystem devices carrying services that billions of users like and rely which are front and...
Didi is a play on the whim of the state. The Coronavirus may lead the Chinese state to give Didi a bit of breathing space while the economy gets back on its feet, but this space could be short-lived. The main issue facing China now is not containment but getting its economy back on its feet without triggering a further...
The hits keep on coming. SoftBank’s biggest problem following on from WeWork is that every one of its investments that go wrong or have problems will receive intense press attention and scrutiny. The reality is that while SoftBank still has some hits to take as a result of overpaying and investing too much, I think the worst is over. The...
Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.
SoftBank – The domino effect
ERRATUM: Corrects previous version which incorrectly stated that SoftBank has $2.8bn in cash (Q4 19) when the correct figure is $35.9bn. SoftBank goes into cash conservation mode. The dangers of financing growth with debt are coming home to roost as I suspect that the current rush for liquidity has caused SoftBank to move into cash conservation mode, explaining the real...