Turning millions into billions with Alibaba stock


Masayoshi Son’s $20m investment in Alibaba could be worth $58bn after the IPO

Masayoshi Son

Masayoshi Son Image: SoftBank

Fourteen year’s ago the Japanese investor staked $20m on a fledgling internet company that linked Chinese manufacturers with overseas buyers.

The web portal, Alibaba.com, has since grown into China’s dominant e-commerce site and has transformed Son’s 34.4% share into an investment that could be worth over $58bn.

The play, made through Son’s SoftBank Corp, solidifies his position as one of the predominant investors in start-up companies. The 56-year-old has also made overtures to other TMT giants such as T-Mobile, Verizon Communications and Universal Music Group.

However, despite being dubbed “the Warren Buffett of Asia” in a recent Bloomberg interview with Greg Tarr, a managing partner at seed fund CrossPacific Capital in Palo Alto, the financier’s position is significantly more leveraged than Buffet’s.

SoftBank, spawned from a software wholesaler in 1981, is funded in a large part by debt. A $22bn bid for Sprint and a $15bn deal for Vodafone Group Plc’s Japanese unit were almost entirely financed with borrowed money.

According to BGC partners SoftBank is “one of the most leveraged companies in the world.” In total, the company has interest-bearing debt of around $90bn, creating a debt-to-equity ratio of some 320%.

Debts aside, Son is still Japan’s second-richest man with a net worth of $14.9bn.  The potential $58bn recoup from his Alibaba investment would certainly help strengthen his position.