SoftBank's $10 billion gain on the DoorDash IPO will offset the fund's WeWork 'disaster,' says a stock analyst
- David Gibson of Astris Advisory Japan told CNBC on Thursday Softbank will reap a roughly $10 billion profit from its investment in DoorDash's IPO.
- "That offsets the disaster of WeWork only a few quarters ago," the chief investment advisor said. Softbank lost at least $4.7 billion last year by investing in WeWork after the shared-workspace company's IPO failed.
- Shares of DoorDash dipped after the Thursday opening bell, but the company is still worth roughly $52 billion. Meanwhile, Softbank shares gained as much as 18% on Thursday, hitting an all-time intraday high of 8,900 yen.
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Softbank Group Corp's roughly $10 billion profit from its investment in DoorDash's IPO will offset the fund's losses from WeWork's failed public debut, said Astris Advisory Japan's David Gibson.
The chief investment advisor told CNBC on Thursday said that Softbank invested roughly $2 billion in the Doordash IPO, a stake which is now worth more than $12 billion, giving the fund a $10 billion profit.
"They're going to book 10 billion, I mean that offsets the disaster of WeWork only a few quarters ago," Gibson said. Softbank lost at least $4.7 billion last year by investing in WeWork after the co-working company's IPO failed.
Shares of DoorDash closed at $189.51 after its first day of trading, up 86% from the IPO price of $102. The food-delivery company pared back gains after the Thursday opening bell but is still worth roughly $52 billion. Meanwhile, Softbank shares gained as much as 18% on Thursday, hitting an all-time intraday high of 8,900 yen.
"Suddenly Masa goes from losing to being hero very quickly," Gibson added, referring to Softbank CEO Masayoshi Son.
Softbank's Vision Fund invested in DoorDash over four fundraising rounds, according to Reuters. It paid $280 million for its first stake in March 2018, $350 million over two rounds in 2019, and about $50 million in June 2020.
"I think what the market's realizing today is there's more behind it," Gibson said of SoftBank. "There's more companies coming out of the vision fund that will IPO in the coming quarters, that actually end up being positive for the Vision Fund's investment valuation."
A number of SoftBank-backed companies are set to IPO in the coming quarters, including South Korea's top online retailer, Coupang Corp.