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Softbank makes $12 billion from Web – on paper

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Transnational cyber-mover and shaker Softbank boasted yesterday that it had made $12.5 billion on paper via its investments in nine companies. This is (apparently) quite a turnaround for the Japanese company that even the Japanese were starting to have severe doubts about a while back. It should also provide further grist to the mill of at least one analyst (see Analyst slams Softbank investments) with some interesting theories about Softbank and its Web investments. Softbank's gains come largely via the wonderful Web stock boom, rather than through investment in wonderful profit-making companies. For example, it has made $10 billion on paper from its 31 per cent stake in Yahoo, and then in second place, $853.8 million from E*Trade Group. Excitingly, the company made $295.8 million from Ziff-Davis, which IPOed last year and most certainly doesn't make money itself. Au contraire, it's sitting on a debt mountain it acquired via the restructuring associated with the IPO, and hoping to pay some of it off by issuing a tracking stock in ZDNet. Softbank also, to be fair, made $323.9 million from its stake in Trend Micro, which was projected to make $30 million pre-tax over 1998. According to Softbank, only one of its investments, games publisher GT Interactive, lost it money ($24.9 million). ®

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