Warren Buffett, Bill Gates, and the rabbit-duck illusion: SoftBank's CEO used a bizarre slide deck to rebrand as an investor
- SoftBank CEO Masayoshi Son wants the Japanese conglomerate to be seen as an investment company, not an operating one.
- Son used the rabbit-duck illusion to make his case during SoftBank's earnings presentation on Wednesday.
- He urged investors to look at SoftBank's "shareholder value," not its revenues and profits.
- Asked if he had turned from Bill Gates into Warren Buffett, Son replied that he was more adventurous than Buffett and "still making some craziness."
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SoftBank CEO Masayoshi Son wants the Japanese conglomerate to be viewed as an investment company, not an operating one. He used the rabbit-duck illusion to make the case during his third-quarter earnings presentation on Wednesday.
Son included the optical illusion below in his slide deck:
"What do you see?" the boss of the $100 billion company asked the crowd of investors and analysts. "From your left, it looks like a duck. From your right - in the same picture, same slide - it looks like a rabbit."
The eccentric executive - who invested $20 million in Alibaba back in 2000 after noticing a "sparkle" in the eyes of founder Jack Ma - argued that SoftBank could be viewed two ways as well. He showed a slide that was split down the middle, with "EBIT" (earnings before interest and tax) on the left and "shareholder value" on the right.
"Looking from left, EBIT; looking from right, shareholder value," Son said. "If you want to know how SoftBank is performing, not from the left, you have to look at SoftBank from the right."
Son's view isn't surprising, given SoftBank's operating income nosedived 99% last quarter, from nearly $4 billion to less than $25 million. The decline stemmed from its Vision Fund, which posted a $2 billion loss after writing down the value of its investments in WeWork, Uber, and other businesses.
Instead of profits, Son urged the crowd to focus on SoftBank's shareholder value - the equity value of its holdings minus net debt - which swelled by 22% to $228 billion between the end of December and February 12. A key driver was Uber's stock rallying by more than a third this year.
"Like I said, from left, you see the face of a duck; from right, you see the face of a rabbit," Son concluded.
"I'm still making some craziness"
Given SoftBank is now an investment company rather than an operating company, its revenues and profits are "irrelevant," Son said in his presentation. "You can forget about those numbers."
A journalist asked Son if he was now an investor instead of a businessman. Son pointed to Warren Buffett, the billionaire investor and Berkshire Hathaway CEO, as an example of someone who's considered both.
"So you have changed from Bill Gates to Warren Buffett?" was the next question.
The comparison was fair, "roughly speaking," Son replied. "Mr Buffett and myself are a little bit different," he continued. "I'm the one that's leading the information revolution."
The SoftBank chief added that he's not as conservative as the 89-year-old Buffett, who famously invests in proven, profitable companies.
"Mr Buffett is not an adventurous investor, he's a smart one," Son said. "But I'm still making some craziness."
Son, who visited Buffett three years ago to seek an investment in SoftBank-owned Sprint, has looked up to the investor for years.
"Warren Buffett in the technology industry, that is what I would like to become," he said in an earnings presentation in 2017.
SoftBank is the "Berkshire Hathaway of Internet," Son said in an earnings briefing in 2012.
