According to Laureate BVI, Japan’s SoftBank holds a 37% stake in Alibaba in what could be one of the largest internet initial stock offerings ever. SoftBank is expected to profit more than US$30 Billion if it were to sell its Alibaba stake.
Beverly Hills, CA -- (SBWIRE) -- 05/13/2014 -- Laureate BVI has assumed coverage on SoftBank (SFTBF) as the company reports net profit through March rose 34% from a year earlier.
Laureate reports, shares of SoftBank (SFTBF) are currently trading at US$71.65. SFTBF) has a 1-year low of US$48.80 and a 1-year high of US$88.34. The stock’s 50-day moving average is US$74.85.
Laureate BVI CEO Peter Tasca states, “SoftBank is in a very unique position, they own 37% of Alibaba which is expected to be IPO with a valuation of US$100 Billion. At that price SoftBank could acquire a controlling interest in T-Mobile and with its investment in Sprint create a major telecom company increasing its value 50%”.
SoftBank reported a net profit of Yen586.15 Billion (US$5.8 Billion) for the year ending in March, versus a net profit of Yen437.84 billion a year earlier.
Tasca states, “SoftBank is really well positioned not only with lots of cash but also intellectual properties. This company owns over 1,300 internet and mobile companies, our focus is on SoftBank rather than the Alibaba IPO because it will probably be priced too high initially”.
Laureate states in a research note that in 2013 Alibaba processed 11.3 billion orders worth US$248 Billion, that is more than Amazon (AMZN) and Ebay (EBAY) combined.
Tasca further states, "analysts are over hyping Alibaba and giving a sky high valuation that exceeds US$150 Billion. We estimate the valuation to be closer to US$110 Billion, there are only a couple ways to benefit from this IPO and SoftBank provides the most prudent solution”.
Laureate Trust has a Strong Buy on SoftBank with a target price of US$90.
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