[tytso]

My theory about what is going on, and why it's not totally insane that Softbank is throwing bad money after bad: By throwing in $3 billion more (after already having throwing $11 Billion into WeWork) this gives Masayoshi Son the following three things:

(1) WeWork is able to secure the $6 billion loan commitment.

(2) Softbank gains 51% voting control over WeWork, getting Adam Neumann totally out of the picture.

(3) It avoids WeWork going bankrupt (and setting its value to zero), while Masayoshi Son is in the middle of raising money for Vision Fund 2.

If it goes bankrupt a year from now, Softbank will have already raised money for their next VC fund, and like startup founders of failed companies, Masayoshi Son is probably hoping that people will forget about his prior mistakes / trash fires, and if Vision Fund 2 is at least halfway successful, he'll be able to continue to play his VC games. Being able to play the part of the visionary VC is probably well worth pouring another $3B into the WeWork firepit.

[Judgmentality]

> while Masayoshi Son is in the middle of raising money for Vision Fund 2

I just can't imagine why anyone would put money into the Vision Fund 2 after watching what happened with the Vision Fund 1. I don't have billions of dollars to invest though, so I guess I'm not his target audience. The man is even famous for losing the most money in history, and yet people seem to be rallying for him to do it again.

https://arstechnica.com/information-technology/2012/10/how-s...

Apple and Microsoft signing up as LP's for the new fund seems weird to me. I realize they are sitting on enormous piles of cash and want to find new ways to invest it, and they can comfortably put billions behind extremely risky assets, but even then it makes no sense to me.

I just don't get it, but maybe that's why I'm not a billionaire.

[freewilly1040]

Do we know how much Apple and Microsoft are actually putting in? I can't find anything about it.

To put numbers on "enormous piles of cash", Apple books $20 billion in profits a quarter [1] and $245 billion cash on hand [2].

My guess is that if they are looking for risky plays, there just aren't a lot of options for the amount of cash they have.

[1] https://www.reuters.com/article/us-softbank-group-vision-fun... [2] https://www.cnbc.com/2019/01/29/apple-now-has-tk-cash-on-han...

[adventured]

Apple is printing massive profits, however they're not quite $20 billion per quarter massive.

Their last quarter was $10b in net income, and $11.5b in operating income. The last four quarters were $55b in net income, $64b in operating income.

Apple's current cash plan is to draw it down to net zero, according to Cook, through returning cash to shareholders. I would expect them to continue to be extremely conservative on investments and acquisitions as per their historical norm. Their net cash is down to about $100 billion now, and total cash was $210b as of the third quarter results (likely under $200b now).

[notfromhere]

Would be nice if they could throw some change at a not-terrible keyboard design.

[manigandham]

It's mostly oil money. They have to park it somewhere. The Vision fund is a nice cover to invest in fancy tech companies but there's no real selection process. Instead they relied on having so much money that they can just buy their way to success.

Now they're realizing it's not that simple to deploy $100 billion without vastly skewing the market and basically creating their own bubble.