US investment company Tiger Global amassed a stake worth more than $1 billion in SoftBank group, stating that Japanese technology and telecoms company’s share price is “meaningfully undervalued”.
In a quarterly investor letter revealing the stake, Tiger Global said: “The combination of a world-class set of assets trading at a record discount to net asset value strikes us as an odd anomaly that is unlikely to exist forever, and we have invested over $1 billion… to demonstrate our conviction”.
Tiger Global’s stake building could be key as SoftBank founder Masayoshi Son (pictured) looks to boost value of the company, noted Financial Times (FT).
SoftBank holds numerous stakes in technology and telecoms companies worldwide, including a majority stake in US operator Sprint. It is also looking to make investments in other technology areas through its Vision Fund, which is closing in on $100 billion worth of backing.
According to the FT, Tiger Global sees many opportunities for SoftBank to grow its value in the future.
It estimated that if its Vision Fund generates two and a half times its original investment in seven years, SoftBank could benefit from an addition $73 billion of value before tax.
The investment company is also hopeful that SoftBank’s listing of its mobile business in Japan, for which it filed a preliminary application this week, could be key to boosting the value of the company.
Tiger Global suggested that the proposed sale of Sprint to US rival T-Mobile US will also bear fruit.
SoftBank currently has a market capitalisation of JPY9.6 trillion ($86.3 billion).