Sun and Ma, who have been partners for 21 years, have retired from each other’s board of directors. On June 25, reporters learned from Alibaba that at SoftBank Group’s annual general meeting held on the same day, SoftBank Group CEO Sun Just announced that he would withdraw from alibaba group director from now on. Earlier, on May 18, SoftBank group announced that Mr Ma would step down as a director of SoftBank Group, with a june 25 deadline. This means that on June 25th, Sun and Ma Ying’s old partners achieved a “mutual retreat” from each other’s board of directors.
“As a director, I’m ‘graduated’ from Ali. “
Mr. Sun said at the shareholder meeting that his departure, like Mr. Ma’s resignation as a director of SoftBank, did not mean any differencebetween between the two, and that Alibaba remains the crown jewel in SoftBank’s portfolio, Bloomberg reported.
The relationship between Ma Yun and Sun Justice was evaluated as soul partner (soul mate) by people close to Sun Justice. The two have made mutual achievements, with Alibaba growing from a start-up to a super-sized company with a market capitalisation of more than $600 billion, and Sun Just because of Alibaba’s pot of money.
Ma Yun once judged Sun justice, probably the most courageous of the global investors, few people in the world have his courage. Sun just said that he and Ma Yun are the same kind of people, have a little crazy.
One is to invest in the bull, the other is the godfather of entrepreneurship, even if the future parted ways, the two of these experiences will still be regarded as a good story.
“Love at first sight”, Ali received $20 million investment from SoftBank
Alibaba’s huge business map started in 1999, When Jack Ma gathered at his home in the lakeside garden to hold an entrepreneurial rally at his home in the lakeside garden. At the start-up rally, Mr. Ma set his vision for a venture, making it the world’s greatest Internet company Chinese founded, but he was rejected at least 40 times in Silicon Valley before raising $20m from SoftBank in 2000.
In 2008, after becoming famous, Ma Yun recalled meeting With Sun in “Win in China.” “See Sun justice that day, I did not wear a suit, very casually see, the heart did not think about money, met me and Sun just talk about what I want to do, the words were interrupted, he asked me how much money I want?” I said I didn’t want money. Sun just also advised me, you have to ah, but also teach me how to spend money fast. Some people don’t believe in love at first sight, maybe it’s love at first sight. “
This meeting, Sun just offered to invest 40 million U.S. dollars in Alibaba, although it sounds like a mood, but still by Jack Ma refused. Ma Yun’s reason is that he only managed 2 million yuan at most, take so much money will not be used, the company will certainly have a problem. Sun just price to 35 million U.S. dollars, Ma Said to go back to think about, after consulting with the team, Ma Yun flew to Japan to negotiate with Sun Justice again, the investment amount is still not finalized.
The final investment amount is based on an email. “I wrote $20 million to Sun Justice, agreed to do it, and didn’t agree to do it. Sun just back to me two words, go ahead (go dry). In the coldest winter on the Internet, I never harassed him, and he never harassed me, and we trusted each other. Jack Ma said.
Time has proved that investing $20m in Alibaba, which was still in its infancy, was SoftBank’s most successful bet on technology companies.
On how to evaluate Sun’s justice, Ma Yun said: “The difference between me and him is that I look very smart, i am not actually smart, that brother is really not smart, but he is very smart, big wit.” At that time, Ma Yun hoped that through his example of justice with Sun, to tell Chinese entrepreneurs, with venture capital negotiations, waist to stand up, but with respect in the eyes. “You have to prove with your actions that you are more likely to make money than a capitalist.” I’ve talked to venture capitalists many times, and you think you’re talking more than I do, and you’re going to do it. Now, I can turn my money into more money, and you can find better projects. We are common and equal. “
In 2017, In an interview withmedia, Sun recalled his investment in Alibaba. “When Jack Ma started out in business with no plans, the company had no income, and the employees were about thirty or forty, but he had a pair of wise eyes, excellent vision, and sparkle. Judging from the way he talks and the way things are seen, it is clear that his leadership is extraordinary, and despite his flawed business model at the time, he has a great ability to talk and he has the strength to be a role model for China’s younger generation. Sun said.
In December 2019, Sun said again in a conversation at the University of Tokyo that Mr. Ma was different from all the entrepreneurs he had met, not talking about business models or money, “he just said his vision, I could feel his determination and passion, and five minutes later I said I understood, you’re going to change the world.” “
Working with each other’s directors in each other’s company
After investing in Alibaba for $20 million in 2000, SoftBank invested another $40 million in 2004, accounting for more than 28 percent of the shares. In October 2005, Sun became a director of Alibaba, and in May 2007, SoftBank announced that Jack Ma had been invited to become the 10th director of SoftBank Group to participate in SoftBank’s major event decisions. So far, Jack Ma has served on SoftBank’s board of directors for 13 years, while Sun has served on Alibaba’s board for 15 years.
There are few reports of Sun’s direct involvement in Alibaba’s management, but Sun has spoken out and supported Ali’s partnership system. “Over the years, Alibaba has created tremendous value for shareholders, and the results have been amazing, ” Mr Sun said. Alibaba’s special corporate culture is at the heart of its success, and it is very important for businesses to keep this culture moving forward. Therefore, we are very supportive of Alibaba’s partnership system.”
In 2013, Alibaba formally introduced a partnership system that requires companies to be controlled by the backbone of each line of business rather than shareholders, and can even be nominated by partners for the majority of directors on the board, rather than allocating board seats based on the number of shares. This system guarantees the power of Ali’s management and continues to this day.
At the time, Ali was interested in listing in Hong Kong because the “different rights to the same shares” partnership system had cost Ali and the HkEx a bad start. In September 2014, Alibaba’s 15th anniversary listing on the New York Stock Exchange set a record for the largest U.S. IPO, with SoftBank’s stake in Alibaba up about 2,900 times in value.
SoftBank’s relationship with Alibaba is always compared with Yahoo. Both SoftBank and Yahoo have been major shareholders in Alibaba, but their relationship with Ali is more nuanced than SoftBank’s, and at one point publicly feuded.
In 2005, Yahoo became Alibaba’s majority shareholder by investing $1 billion in Alibaba and packaging its Chinese Yahoo assets into Alibaba, while SoftBank became the second-largest shareholder, but Yahoo was stripped of Alibaba’s listed assets by Alipay and feuded with Alibaba. After Alibaba’s listing, Jack Ma formed control of Alibaba through a partnership mechanism, and Yahoo!, which has a weak business, withdrew from the board and became alibaba’s financial investor. In May, Yahoo said it would start selling alibaba shares on May 20, with the option of clearing positions.
Regarding Ali’s equity structure, Wind statistics show that as of November 26, 2019, SoftBank held a 25.2 percent stake in Ali, which is worth more than $150 billion at Ali’s current market value of $606.886 billion.
In addition, alibaba Group has signed a voting agreement with Jack Ma, Cai Chongxin, SoftBank and Altaba, with SoftBank and Altaba agreeing that as long as SoftBank owns at least 15% of Alibaba Group’s outstanding shares, they shall vote in support of alibaba partnership nominees at their annual general meetings, according to Alibaba’s Prospectus for the November 2019 listing. The vote also agreed that SoftBank would have the right to call a director to the board until SoftBank’s stake was less than 15 per cent of Alibaba Group’s outstanding shares.
On June 25th Alibaba announced that Even if Mr. Sun resigns as alibaba’s director, SoftBank still has the right to nominate a director to the board.
SoftBank loses big loss due to investment loss, reduces Ali’s “filling pit”
On December 6th last year, at the 2019 Tokyo Forum, Mr Ma judged Mr Sun as perhaps the most courageous of the world’s investors, and few people in the world had the courage to do so. Sun just said: “It is really bold overthe, let me lose a lot of money.” “
Alibaba’s stock remains SoftBank’s most valuable asset. On more than one occasion, Mr. Sun has said he will hold a stake in Alibaba for as long as possible. Even at SoftBank’s annual general meeting on June 25th, Mr Sun said softbank would still hold Alibaba shares for as long as possible.
In March 2019, Sun said in an interview withmedia: “Now Alibaba’s revenue is still growing at 40% per year, profits will continue to grow, Jack Ma is still Alibaba’s largest individual shareholder, SoftBank is also the largest shareholder, we are a good friend and partner.” Jack Ma will come up in time when the management team needs help, and he keeps telling me that his style is to get young people growing up as quickly as possible so that he doesn’t have to focus too much on his day-to-day work, but on thinking at a higher level. Sun said.
In fact, SoftBank has been reducing its holdings of Ali since 2016, and on March 23rd softbank abruptly announced that it would sell $41 billion of assets, including $14 billion worth of Alibaba stock.
The loss is believed to be the direct cause of SoftBank’s sell-off of Ali and even the withdrawal of Sun Justice from alibaba group directors.
Sun’s firm investments in WeWork and Uber in recent years have been questioned over their poor management and losses. SoftBank reported its first quarterly operating loss in 14 years as weed down investments at WeWork and Uber, according to its second-quarter results for fiscal 2019. In addition, SoftBank Group’s consolidated financial results for fiscal 2019 (April 2019-March 2020) showed a net loss of 961.5 billion yen (about 63.8 billion yuan, up from a profit of 1.4111 trillion yen in the previous fiscal year), kyodo news agency reported. The loss was the largest since it was founded in 1981, and the fiscal year was the first since fiscal 2004.
On May 18, SoftBank Group Chief Executive Sun Justice said at his big-loss earnings release that SoftBank Group would reduce its stake in Alibaba and raise 1.25 trillion yen ($11.7 billion) to buy back SoftBank shares.
In addition to Ali, another high-quality asset that SoftBank has a large stake in is T-Mobile. T-Mobile is the third-largest communications company in the United States, with a market capitalization of more than $125 billion. To raise money, SoftBank is also seeking to sell its $20 billion T-Mobile stock.
Vision Fund, SoftBank’s venture capital arm, lost $17 billion in the fiscal year ended March 31, 2020, including a $10 billion loss in the January-March quarter alone, dragging down SoftBank’s net loss of $9 billion for the fiscal year. In addition, some of the series of technology “unicorns” invested by vision funds did not make a profit even before the global outbreak of new crown pneumonia.
As of the end of March, The Vision Fund had invested $75 billion in 88 start-ups with a market capitalisation of just $69.6 billion, Reuters reported. SoftBank lost nearly $10 billion on investments in Uber, the ride-sharing company, and WeWork, a shared office space.