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What's going on?
Japanese technology conglomerate SoftBank Group which owns the worlds largest technology investment fund, Vision Fund reported a 49% increase in its profit for the second quarter on Monday.
What does this mean?
SoftBanks tidy profit was boosted by Vision Funds sale of its Indian online retailer, Flipkart to US retail giant and owner of many a kart, Walmart. Vision Funds still pretty new this is its first major divestment (the opposite of investment, typically when a company sells an asset for cash) and it went pretty well, by all accounts. SoftBank as a wholes profit for the quarter was $6.4 billion, of which $2.2 billion came from Vision Fund. The fund made a 60% return on its sale of Flipkart, which it bought and sold within a year.
Why should I care?
For markets: A SoftBank initial public offering (IPO) commeth.
SoftBank is increasingly shifting away from its investments in telecoms, where it provides mobile, internet, and fixed line services (does anybody still have a fixed line these days?!). The firm is planning to publicly list its Japanese telecoms unit whichll come under pressure soon from competitor Rakutens imminent launch of its own wireless services. SoftBanks second quarter telecom earnings rose less than 1%, so it doesnt exactly have a lot of wiggle room in the sector. The listing is slated to be one of Japans biggest-ever IPOs.
The bigger picture: The Oracle of Omaha continues to succeed.
Another huge investment company, Warren Buffetts Berkshire Hathaway, also reported fresh second-quarter earnings its profit rose 67%. The conglomerate beat expectations, citing the growing US economy as well as its insurance underwriting businesses (like GEICO). One of Berkshires biggest stock holdings is, fittingly, Americas first trillion-dollar company Apple. It seems that a rising tide does, indeed, lift all boats.
Originally posted as part of the Finimize daily email.
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