Tiger Global has poured more than $1 billion into SoftBank Group, according to the Financial Times. The newspaper reports that the firm told investors SoftBank’s shares are “meaningfully undervalued.”
In response to a request for comment, SoftBank sent the same statement to TechCrunch as other media outlets: “We continue to believe the market significantly undervalues our stock and we welcome the support from a sophisticated institutional investor like Tiger Global.”
Tiger Global and SoftBank share several investments in common, including Alibaba, Flipkart and Uber. According to a quarterly investor letter obtained by the Financial Times, Tiger Global wrote that “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.”
It also said that “in our view, the opportunity to buy the shares cheaply exists today because SoftBank’s stock has not appreciated in nearly five years, even though the value of its Alibaba stake has increased by over $90 billion, more than SoftBank’s entire market capitalization.”
The Financial Times reports that Tiger Global believes SoftBank can create an additional $73 billion of value before tax if its $100 billion Vision Fund returns 2.5 times its original investment over the next seven years. Other growth prospects it cited include the upcoming initial public offering of SoftBank Mobile, its Japanese telecoms unit, and the potential merger of Sprint, which SoftBank holds a majority stake in, and T-Mobile, pending regulatory approval.
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