[TomsHardware] Softbank Sells Entire $3.6 Billion Nvidia Investment - Page 3 - Overclock.net - An Overclocking Community

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[TomsHardware] Softbank Sells Entire $3.6 Billion Nvidia Investment

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post #21 of 35 (permalink) Old 02-08-2019, 03:09 PM
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So how does this actually work ? How much "money" from Softbank was actually at Nvidia, and how/when do they give it back ?

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post #22 of 35 (permalink) Old 02-08-2019, 03:14 PM
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Quote: Originally Posted by Kaltenbrunner View Post
So how does this actually work ? How much "money" from Softbank was actually at Nvidia, and how/when do they give it back ?
Lol they sold their shares of Nvidia stock.

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post #23 of 35 (permalink) Old 02-08-2019, 04:07 PM
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Quote: Originally Posted by Kaltenbrunner View Post
So how does this actually work ? How much "money" from Softbank was actually at Nvidia, and how/when do they give it back ?
I'm only lightly versed on this subject but my general understanding is stocks exist almost purely on the price a person is willing to pay.
Some sucker (or groups of suckers) had to buy the stocks from Softbank.
Stock Markets consist almost entirely of groups of rich people trying to steal money from each other by betting on the future price of stocks. Any time you see the price of stock fluctuate someone wins and someone loses.
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post #24 of 35 (permalink) Old 02-08-2019, 04:15 PM
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OK so 3.6Bn is not just being pulled back out of Nvidia, it wasn't a loan either, it's stocks, and softbank is selling them to others.

Well I wouldn't want to be at those meetings

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post #25 of 35 (permalink) Old 02-08-2019, 11:13 PM
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Quote: Originally Posted by b.walker36 View Post
I mean its most likley they took it out of the fund becuase the expected growth was not there and would hurt their fund.
Any of the tech companies, not matter how old and how rich should ever hear that from an investor.


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It does not mean that Nvidia is in trouble.
Not in the immediate future.


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They could be but this from what I'm reading in their report doesn't mean too much yet other than they didn't expect enough from nvidia in the future to keep it in one of their funds.
Whatever that I've read about SoftB is that they're smart in investing. When a billionaire who invests in stock for a living says they're not expecting much from Nvidia, the market listens.

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They also sold them to someone else so clearly someone thinks there is still value.
Someone profited from buying them this low. There could be future announcement from Nvidia where the stocks could skyrocket, netting the guy millions.

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post #26 of 35 (permalink) Old 02-08-2019, 11:24 PM
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Quote: Originally Posted by huzzug View Post
Someone profited from buying them this low. There could be future announcement from Nvidia where the stocks could skyrocket, netting the guy millions.
On paper...
Unless that person sells them (and we get another thread like this), then they'll have superficial but real paper money.

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post #27 of 35 (permalink) Old 02-09-2019, 06:48 AM
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A few things that are missing from tom's report:

1. Softbank has 36B$ in debt but hold 227B$ in equity. And they wanted to reduced the debt, hence selling stocks or reducing funds (like 14B$ less investment in weworks for 2019).
2. Softbank bought the nvidia shares at 105$, so they still made a lot of money selling them for 218$ as they had a protection plan (granted not the same if they sold them at 294$ at peak).
3. They sold shares they hold on different companies at 23.5B$ to fund buybacks they are in the process of purchasing.


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post #28 of 35 (permalink) Old 02-10-2019, 07:09 PM
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Quote: Originally Posted by Baasha View Post
Indeed. Troubled waters for Nvidia lie ahead. Their stock was ~ $290/share around Oct. 2018. It's now ~ $150/share.

Regarding big sell-offs, the 2001 dot-com bust was triggered by Ellison selling ~ $900M of Oracle stock - sending shockwaves in the markets and many companies worth hundreds of millions (a few more than a billion) vanished in record time.

Masayoshi Son is considered a genius and astute investor; if he's dumping NVDA, it's bad news. Period.
To be fair, at close to $300 they were definitely overvalued (and overhyped), and that price level would not have been sustainable anyway.

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post #29 of 35 (permalink) Old 02-10-2019, 08:34 PM
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Quote: Originally Posted by Defoler View Post
A few things that are missing from tom's report:

1. Softbank has 36B$ in debt but hold 227B$ in equity. And they wanted to reduced the debt, hence selling stocks or reducing funds (like 14B$ less investment in weworks for 2019).
This is why people who never worked on or around wallstreet shouldn't comment on stock news. You're mostly right, though the debt is entirely paper. see a huge percentage of major trades on wallstreet are leveraged trades, meaning they're made on debt. The fact a financial institution has debt means absolutely nothing excepting for the fact that they're doing leveraged trading, which every financial institution does.

Billions of dollars can change hands on wallstreet then change again all on debt instruments on a daily basis. Even more interesting is how many trades take place without actual money changing hands at all. See traders on wallstreet can actually buy stock and then hold off paying for that stock for 3 days. Of course sometimes the expected turn around sale doesn't happen and the financial institution will then pay for the stock which they're holding on to past 3 days with debt still intending to sell it for a profit shortly.

I'd be more concerned about a large player like softbank not having debt at all.

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post #30 of 35 (permalink) Old 02-10-2019, 08:55 PM
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Quote: Originally Posted by Kaltenbrunner View Post
OK so 3.6Bn is not just being pulled back out of Nvidia, it wasn't a loan either, it's stocks, and softbank is selling them to others.

Well I wouldn't want to be at those meetings
I think where the rubber meets the road and this actually hurts Nvidia is in their ability to create and sell new stocks.
I'm assuming that if your stock price is high and demand is unrelenting you can just keep creating new stocks and eat up money from investors.
The danger is if you're desperate and undercut average prices to suck in new investors then stock price goes down and all your old investors hate you because you're supposed to be making stock prices go up, and if enough people see a downward trend and say "This is bad I'm getting out" then you have a crash and your reputation on the stock market is ruined.
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