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Masayoshi Son resigns from board of Alibaba; defends SoftBank Group’s investment strategy

Manish Singh
Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., left, speaks while Jack Ma, former chairman of Alibaba Group Holding Ltd., listens at Tokyo Forum 2019 in Tokyo, Japan, on Friday, Dec. 6, 2019. Son unveiled a $184 million initiative Friday to accelerate artificial intelligence research in Japan, enlisting Ma to expound on his goal of commercializing the technology. Son's company announced a partnership with the University of Tokyo that includes spending 20 billion yen ($184 million) over 10 years by mobile arm SoftBank Corp. to establish the Beyond AI Institute. Photographer: Kiyoshi Ota/Bloomberg via Getty Images

SoftBank Group founder Masayoshi Son said on Thursday he is leaving the board of Jack Ma’s Chinese e-commerce giant Alibaba Group today, a month after Ma left the board of Son’s technology group.

Son said he sees the move as “graduating” from Alibaba Group’s board, his most successful investment to date, as he swiftly moved to defend the Japanese group’s investment strategy, which has been the subject of scrutiny and public mockery in recent quarters.

Son said his conglomerate’s holding has recovered to the pre-coronavirus outbreak levels. The firm has benefited from the rising value of Alibaba Group and its stake in Sprint, following the telecom operator’s merger with T-Mobile. Son said his firm has seen an internet rate of return (or IRR, a popular metric used by VC funds to demonstrate their performance) of 25%.

In a shareholder meeting today, he said he was worried that many people think that SoftBank is “finished” and are calling it “SoftPunku,” a colloquial used in Japan which means a broken thing. All combined, SoftBank’s shareholder value now stands at $218 billion, he said.

Son insisted that he was leaving the board of Alibaba Group, a position he has held since 2005, on good terms and that there hadn’t been any disagreements between him and Ma.

Son’s move follows Jack Ma, who co-founded Alibaba Group, leaving the board of SoftBank last month after holding the position for 13 years. Son famously invested $20 million in Alibaba 20 years ago. Early this year, SoftBank still owned shares worth $100 billion in Alibaba.

A range of SoftBank’s recent investments has spooked the investment world. The firm, known for writing big checks, has publicly stated that its investment in ride-hailing giant Uber, office space manager WeWork and a range of other startups has not provided the return it had hoped.

Several of these firms, including Oyo, a budget-lodging Indian startup, has moreover been hit hard by the pandemic.

Son, who has raised $20 billion by selling T-Mobile stake, said after factoring in other of his recent deals SoftBank had accumulated $35 billion or 80% of the total planned unloading of investments.