Masayoshi Son, the second-richest man in Japan, likes to think ahead — way ahead — and to shake things up in the present.
In 2010, Son, the billionaire founder of Softbank Corp., laid out a plan for his company’s next 300 years. For a start, he would invest in 5,000 companies by 2040, giving his unborn successors a base to build on. And one of his targets now is Sprint Nextel Corp. of Overland Park.
Reports on Thursday that Softbank was in talks to take over or make a substantial investment in Sprint rippled through the telecom industry. Such a deal could make Sprint a much stronger competitor for AT&T and Verizon Wireless. And on Friday, reports from Japan said its three biggest banks were considering loans of as much as $19 billion to help Softbank acquire Sprint.
After rising 14 percent on Thursday, Sprint shares slipped back a bit Friday, closing at $5.73, down 3 cents. The markets have been far less kind to Softbank, sending its U.S.-traded shares down 8.3 percent Thursday and an additional 8.55 percent Friday. They closed at $15.50, down $1.45.
Son’s ambitions have built a personal fortune estimated at $7.7 billion by the Bloomberg Billionaires Index. He has taken stakes in Yahoo Inc., Alibaba Group and Zynga Inc., and in his biggest deal bought Vodafone Group Plc’s mobile-phone business in Japan in 2006. His talks to buy into Sprint fit with his goal of expanding in the U.S., and making Softbank one of the world’s 10 biggest companies in the next 30 years.
“Son has been buying up companies one after another,” said Mitsuo Shimizu, an analyst at Iwai Cosmo Securities. “He’s very bold and takes a lot of risks to make Softbank bigger.”
In his 300-year plan, Son, 55, laid out a Darwinian comparison of business to living species and forecast that 99.98 percent of companies would cease to exist in their current form over the next 30 years. He vowed that Tokyo-based Softbank would survive.
“I’ve gathered you here to talk about our 30-year vision, but while I’m telling stories and this may be my last one, may as well make it 300 years,” Son said when he presented the plan in 2010. “As a founder, I’ve played my role by creating Softbank’s DNA.”
Son wasn’t available to comment for this article, Softbank spokesman Takeaki Nukii said by phone.
The executive, born in Japan to Korean parents who had immigrated to the country, left home at 16 to study in the United States and was inspired to a career in technology after seeing a schematic for a microprocessor in 1975, according to a Softbank presentation.
His entrepreneurial streak emerged at the University of California-Berkeley, where he invented a voice-operated multilingual translator that he sold to Sharp Corp. for 100 million yen in 1979, about $456,000 at the average exchange rate that year, or $1.27 million today. He also capitalized on a burgeoning appetite for video games, importing bestselling Space Invaders machines from Japan and leasing them to cafeterias.
After he returned to Japan, in 1981 he started Softbank as a software distributor. His company helped introduce Microsoft and Cisco products to the Japanese market.
In the late 1980s, he offered a system enabling fixed-line phone users to choose operators with the cheapest rates, threatening the dominance of Nippon Telegraph & Telephone Corp., which went private in 1985. When Son introduced Softbank’s broadband Internet service in 2001, he grabbed customers from NTT with free modems and prices that undercut the larger operators by as much as half.
By 2006, Son had transformed his Internet venture capital company into a full-fledged phone service firm similar to NTT, spending more than 2 trillion yen to buy Japan Telecom Co. and the Vodafone unit.
Softbank was the first carrier for Apple Inc.’s iPhone and iPad in Japan, helping the company boost net income sevenfold over the past four years to a record 314 billion yen in the 12 months ended March 31.
The company’s shares tumbled after the Vodafone acquisition and have yet to fully recover. Softbank’s market value is 2.65 trillion yen as of today, compared with 3.49 trillion yen on March 3, 2006, the day before Softbank confirmed it was in talks to buy the Vodafone unit, according to data compiled by Bloomberg.
The experience of foreign telecommunications companies’ buying into the U.S. market also hasn’t been good. Deutsche Telekom, NTT DoCoMo and France Telecom have struggled to profit from investments in the world’s largest economy — whether because they overpaid or lacked sufficient oversight of assets. Deutsche Telekom’s T-Mobile USA is worth one-fourth less than it was a decade ago, and NTT DoCoMo wrote down most of the value of its stake in the predecessor to AT&T Inc.’s wireless business.
Christopher Watts, an analyst at Atlantic Equities in London, said, “The history is littered with examples of telcos that tried to enter the U.S.”
On Friday, Standard & Poor’s placed the BBB long-term corporate credit and senior unsecured debt ratings of Softbank on credit watch with negative implications because of the possible investment in Sprint.
“The transaction, if it proceeds, may undermine Softbank’s financial risk profile,” S&P said in the statement.
But Son is nothing if not ambitious, and willing to take risks. He has said he aims to raise Softbank’s market value to 200 trillion yen by 2040.
“A person’s life is over in 50, 100 years,” said Son in 2010, as he updated a previous 300-year plan. “But a company lives on through the people it is composed of, and Softbank group has to survive even after I’m gone.”