Multi-national tech giant and majority owner of Sprint Corp., Softbank Group Corp is reportedly considering taking its Japanese wireless business – Softbank Corp – public. While the company has not yet confirmed that it will do so for certain, sources say the company hopes to sell off around 30-percent of itself for around $18 billion – effectively representing the largest initial public offering in around 20 years for the region. The company would use the funding gained through the sale to re-invest in itself via further buy-ins with technology companies around the world. The move wouldn't necessarily be a break in Softbank's usual operating procedures, as it already invests itself heavily into various international tech companies. However, according to reports, it would afford the group with the funds to place itself as one of the top technologies investors in the world.
In fact, according to one professor at Michigan's Ross School of Business, Erik Gordon, the move is effectively a way to gain disposable funds without incurring any debt or dampening the company's equity. Moreover, it would be smart for the company to conduct its first public offering at the percentage it is reportedly looking to sell since it leaves the majority of control in its own hands rather than in the hands of those investors. Beyond that, although Japanese rules ordinarily would require that 35-percent of the company is put up for the initial offering, the company may be able to get away with a smaller share due to its intention to sell internationally.
As to the immediate impacts on the company, even though no final decision has been made in the matter, the company's shares shot up to finish at around 3 percent higher than when the news broke. That's good news for investors in Softbank Group, whose current market capitalization rests at around $92 billion. With further consideration for the company's stake in Alibaba valued at approximately $140 billion and other investments, coupled with a reported debt of only $100 billion at the end of September, the company already stands strong in the market. Bearing that in mind, if Softbank Group does take itself public, the move would definitely give the company the freedom to explore investments in other areas of technology.