FirstFT: Masayoshi Son could reconsider taking SoftBank private

SoftBank’s record $23.4bn quarterly loss, a pledge of heavy cost-cutting and an hour of public self-criticism by its founder Masayoshi Son could push the Japanese billionaire to reconsider a management buyout of the technology conglomerate.

Analysts and investors said the latest results, which delivered fresh signs that SoftBank is preparing to sell key operations such as Fortress Investment Group and focus more exclusively on its two Vision Funds, raised questions over whether it still needed to be listed at all.

People close to the company confirmed that Son has discussed the option of taking SoftBank private on several occasions over the past three years but had always rejected the idea, in part because of pressure from the company’s biggest Japanese banking lenders, notably Mizuho.

SoftBank’s unprecedented spew of red ink in the April to June quarter sent shares in the company 8 per cent lower during trading yesterday as investors weighed whether, without a rebound in global tech stocks, SoftBank could later be forced into further valuation writedowns on the unlisted portion of its Vision Fund portfolios.

Do you think SoftBank should consider a management buyout? Tell us in our poll below. Thanks for reading FirstFT Asia. — Emily

Five more stories in the news

1. Taipei accuses Beijing of trying to control Taiwan Strait Taiwan’s foreign minister Joseph Wu has warned that China could use military drills around the island to impede international shipping and air traffic and deny the US military access to the area. The warning came after the People’s Liberation Army said it would extend its joint air and naval exercises for a second day.

2. Trump’s Mar-a-Lago residence raided by FBI agents The unprecedented raid on former US president Donald Trump’s Florida home has sparked a backlash from Republicans, who portrayed it as a politically motivated attack. One person familiar with the search said it was related to Trump’s handling of sensitive material from his time in the White House. The Justice Department and FBI had yet to comment.

• Go deeper: Edward Luce explains why putting the former president in the dock risks civil strife, but a failure to act is also dangerous.

3. Carlyle boss quit after being denied $300mn pay package Carlyle Group’s ousted chief executive Kewsong Lee asked for a pay package worth up to $300mn over five years and resigned from the US private equity group after its co-founders refused to even discuss the deal, multiple people with knowledge of the matter said.

4. Tibet cities in lockdown over first Covid outbreak since 2020 Officials have announced lockdowns in parts of the Tibetan capital Lhasa and shuttered the iconic Potala Palace, previously the winter home of Dalai Lamas, after a cluster of 18 Covid-19 cases were detected in the city.

5. Bangladesh warns on Belt and Road loans Bangladesh’s finance minister AHM Mustafa Kamal warned that developing countries must think twice about taking more loans through China’s Belt and Road Initiative as global inflation and slowing growth add to the strains on indebted emerging markets. Kamal also urged Beijing to be more rigorous in evaluating its loans.

The day ahead

China inflation data July’s consumer price index and producer price index figures are set to be released today. Wall Street stocks and Treasury bond prices fell on Tuesday ahead of the release of closely watched US consumer price index data, which will also be released in the US morning.

Corporate earnings Cathay Pacific, Deliveroo, Foxconn, Toshiba, and Walt Disney are set to report results today.

Rishi Sunak BBC interview The former chancellor and Conservative party leadership contender will be interviewed by the BBC’s Nick Robinson. Sunak’s opponent Liz Truss has a clear lead in the betting market.

What else we’re reading

Xi Jinping completes grip on power Xi finally has something that eluded him for almost a decade, explains Tom Mitchell in Singapore in this insightful article: a trusted confidante at the top of China’s police ministry. Wang Xiaohong’s appointment as public security minister in June marked another breakthrough for Xi in his relentless consolidation of power.

How corporate raiders became teams of rivals The private equity industry was founded by mercenary dealmakers who bludgeoned opponents to win control of large corporations such as RJR Nabisco, Alliance Boots and Philips Semiconductors. Now, firms nurture complex relationships with their competitors. How did they get here?

Rich and poor should mingle more New research suggests that children from low-income families who are friends with wealthier peers will earn more later in life. The analysis points to the importance of “economic connectedness” — in short, having rich acquaintances — as a valuable early rung on the economic ladder.

Biden tax proposals fall short of OECD standards The US played an instrumental role in encouraging 136 countries to sign up to a global tax deal tabled by the OECD last October. But the Inflation Reduction Act leaves gaps that mean the US will not be in line with the global deal. Tax correspondent Mary McDougall explains why.

Why are British household energy bills so high? The typical household energy bill in Britain is forecast to soar to £4,420 next April, more than three times the level it was at the start of 2022. Energy editor Tom Sheppard breaks down why Britain’s energy price cap has climbed so high and how it compares with what families pay in other countries in Europe.

Sport

Tennis star Serena Williams will retire after this year’s US Open tournament, concluding a career that ushered in a new generation of players and made the 23-time Grand Slam champion a powerful ambassador for sponsors and black women in business. In a first-person essay for Vogue, Williams said her desire to have more children led to her decision.