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SoftBank’s Son Chases Boyhood Dreams With $100 Billion Fund

When Masayoshi Son was a boy growing up on Japan’s southern island of Kyushu, he kept a notebook to scribble down new inventions he hoped to create one day. Today, the SoftBank founder has almost $100 billion to invest on making the next big thing a reality.

Son’s SoftBank Group Corp. closed the first round of a planned $100 billion investment fund, with money raised from Saudi Arabia, Abu Dhabi, as well as Apple Inc. and Qualcomm Inc. The Vision Fund gives the 59-year-old access to a pool of capital unparalleled in the worlds of private equity or venture capital — the equivalent of four Silver Lakes or 15 Sequoia Capitals.

Masayoshi Son and Yasir Alrumayyan, managing director of Saudi Arabia’s sovereign wealth fund, right.

Photographer: Bandar Algaloud/ Saudi Royal Council/ Anadolu Agency via Getty Images

Son isn’t one for understatement. He has said, without irony, that he has a 300-year plan for SoftBank and aims to build the world’s most valuable company. With the Vision Fund, Son vows to become the biggest investor in tech over the next decade, as he bets on the future of artificial intelligence, connected devices, satellites and the integration of computers and humans. Indeed in April, he led the $5.5 billion investment in China’s Didi Chuxing, the largest venture funding on record.

“We saw a big bang in PCs, we saw a big bang in the internet,” Son said in February on a call with shareholders. “I believe the next big bang is going to be even bigger. To be ready for that, we need to set the foundation and that foundation is SoftBank Vision Fund.”

Son has some enthusiastic supporters, with very deep pockets. Saudi Deputy Crown Prince Mohammed bin Salman agreed to make his country the cornerstone investor with a $45 billion check after a meeting with Son. Besides Apple and Qualcomm, Foxconn Technology Group and Sharp Corp. are also putting in capital. SoftBank said Saturday the fund has $93 billion in committed capital and aims to reach $100 billion with a final close within six months.

Forget Retirement. SoftBank CEO Aims to Be Biggest Tech Investor

Son’s mega-fund will unleash an unprecedented amount of money into sectors already seen as overcapitalized. Private equity returns have plummeted in recent years because there’s too much money chasing too few deals. Venture capital faces similar issues.

“A $100 billion fund is mind boggling,” says Steven Kaplan, a professor at University of Chicago’s Booth School of Business who co-founded its entrepreneurship program. “There’s too much capital now so bringing in more capital doesn’t make any sense.”

Billionaire Masayoshi Son at a news conference in February.

Photographer: Kiyoshi Ota/Bloomberg

Kaplan struggled to think of a precedent for what Son is attempting. He said the closest parallel may be the late 1990s when money poured into U.S. internet companies, fueling sky-high valuations — right until the market crashed.

Private equity firms are sitting on record piles of cash. The amount of unspent money hit $820 billion at the end of 2016, up from $755 billion a year earlier, according to the research firm Preqin. The venture total hit $142 billion, compared with $127 billion at the end of 2015.

“There is already a tremendous amount of dry powder out there,” says Felice Egidio, the firm’s head of venture capital products. “Investment opportunities are getting harder and harder to come by.”

In other words, Son may be more than the most powerful investor in tech — he may be the most dangerous too. A flood of capital into artificial intelligence or driver-less cars, can inflate valuations and spawn too many competitors, leaving everyone struggling to make money.

SoftBank’s Cyber Keiretsu

Son has spent his life defying expectations. He left Japan at 16 to study in the U.S. and ended up at the University of California at Berkeley. While in school, he invented an electronic translator that he sold to Sharp, making his first $1 million.

“It’s like he’s from the future,” said Hong Lu, who began working with Son in California 40 years ago and went on to co-found UTStarcom Holdings Corp.

Son founded his own company in 1981 and began to distribute software for companies like Microsoft Corp. He then built it through a series of high-stakes bets. In a deal that would supply him with cash for other investments, he acquired Vodafone Group Plc’s struggling Japan business and turned it into a profit machine.

His fearlessness almost cost him his company. During the internet bubble, he invested in about 800 companies, vowing to create a "netbatsu," the digital age equivalent of Japan’s zaibatsu industrial conglomerates bound by cross-share ownership. SoftBank shares surged and Son’s net worth hit $68 billion in 2000, almost surpassing Microsoft’s Bill Gates as the world’s richest man. Then the bubble burst and hundreds of his investments went under. His stock fell 99 percent.

But among the wreckage, Son had some winners. He was an early backer of Yahoo! Inc. and he bet on China’s Alibaba Group Holding Ltd., which turned into one of the best venture bets of all time. He parlayed an initial $20 million investment into a stake that is now valued at more than $90 billion, or 4,500 times his original investment.

If Son was spooked by the crash, he never let it show. He continued to cut big deals, including the $22 billion acquisition of U.S. wireless carrier Sprint Corp. Last year, he made the biggest deal of his career, buying chipmaker ARM Holdings for $32 billion.

After the announcement, his stock got hammered as stunned investors fled. “It would be unfair to Masa Son if we said we were not warned that some ‘crazy ideas’ were on anvil,” Atul Goyal, an analyst at Jefferies Group, wrote at the time. “To us, the ARM acquisition announced yesterday appears largely inconsistent with SoftBank’s investment strategy … It does not inspire much confidence.”

Son responded with an impassioned pitch. He argued this is a rare moment in history when technology’s rapid evolution provides opportunities that may never appear again.

“People think this was a stupid move, they’ve voted with their money,” Son said at the time. “It’s easy to look at where your pieces are now and place the next one nearby. This one is 10, 20, 50 moves ahead.”

SoftBank Closes Funding For Record $93 Billion Investment Fund

That set the stage for the Vision Fund. Son saw once-in-a-lifetime opportunities, while SoftBank’s investors fretted the risks. The question was where he could find a new set of backers willing to finance his vision of the future.

Masayoshi Son.

Photographer: Kiyoshi Ota/Bloomberg

Then the Saudi deputy crown prince came to Tokyo last September just as he was looking for ways to diversify his country’s economy beyond oil. The prince needed to invest billions of petro-dollars in new industries — he even called his effort ‘Vision 2030.’

SoftBank’s Vision Fund was announced publicly in October and Son’s deal-making synapses have been firing even before the fund closed. Son agreed to invest $1 billion in OneWeb Ltd., a startup that aims to beam internet connectivity to every corner of the globe. He is also putting $300 million into WeWork Cos., a New York-based startup that rents out offices to small businesses and freelancers.

Son is raising the Vision Fund because he sees deals he thinks are even more promising than Alibaba. In his February call, he cited the leaders of the sharing economy, including Uber Technologies Inc. and Airbnb Inc.

SoftBank is behind major funding for rivals to Uber. Didi, the biggest ride-hailing service in China, last month announced its record $5.5 billion fundraising, led by the Japanese company. Southeast Asian operator Grab plans to raise more than $1.5 billion in a round backed by the Japanese company, people familiar with the matter have said.

“Uber is redefining the transportation industry now; Airbnb is doing it to the hotel industry. You can expect that to happen in every single industry,” he said in February. He has given a few details of how he plans to use the capital. It is likely to be a mixture of many investments on the scale of OneWeb with a handful of very large deals.

“This won’t be a typical fund,” he said in February. “Most of our investments will range between 20 and 40 percent, making us the largest shareholder and board member, in a position to discuss strategy with the founders.”

Uber’s Kalanick Should Fear This 59-Year-Old Billionaire: Gadfly

The Vision Fund will be based in West London’s Mayfair and advised by SoftBank subsidiaries collectively called SB Investment Advisers. Rajeev Misra, SoftBank’s head of strategic finance, will be chief executive officer of SB Investment Advisers and a member of the fund’s investment committee.

Son will have unusual influence. He will be the only so-called key man in the fund, according to a person familiar with the matter. There are typically several people with such a designation in investment funds, which gives limited partners the option to withdraw from the fund if one of those key men leave.

Dealmakers are cautious. Ted Gooden, managing director at Berkshire Capital Corp., predicts returns are likely to decline given the excess of capital. “There is so much money in the system, it changes the industry,” he said.

Not everyone outside of Son’s orbit is a skeptic though. David Brophy, a finance professor at the University of Michigan, said the sheer size of SoftBank’s fund will give Son advantages that no other investor has. He can jump into deals that are more capital intensive than anyone else can handle and he can keep funding them longer.

“You can walk in with muscle that no one else has,” said Brophy, who is also director of the university’s Office for the Study of Private Equity Finance. “I wouldn’t focus too much on what we see in the rear view mirror. It’s more important to look ahead.”

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Cowboys News: Can Eagles contain Dak Prescott and DeMarcus Lawrence? – Blogging The Boys (blog)

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Cowboys vs. Eagles live game discussion – Blogging The Boys (blog)

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Keselowski closing truck team partly because of finances

Brad Keselowski is closing his truck series team at the end of the season, a decision that in part came down to him losing money on the venture.

Brad Keselowski Racing has fielded trucks in NASCAR since 2008, and more than a dozen young drivers have come through his organization. His team has won nine Camping World Truck Series races and twice contended for the championship. Keselowski fields two full-time Fords for Chase Briscoe and Austin Cindric and has about 50 employees.

Yet Keselowski has not turned a profit on his passion, and has said before he loses $1 million a year on the program. Red Horse Racing also suspended its truck operations in May.


“There wasn’t really one reason, but certainly at some point every business needs to have some profitability,” Keselowski said Friday at Bristol Motor Speedway. “But I never went into it expecting to make money, so I can’t really blame that. Everybody is losing a little, but that was one of the factors. I wouldn’t say it was the only one.”

His father, Bob Keselowski, was a Truck Series team owner until 2005.

“The Truck Series is truly special to me given my family’s ties to the history of the sport, and this decision comes with much contemplation,” Keselowski said.

He hopes to one day field cars in the NASCAR Cup Series, and the decision to close the truck operations could move that along.

“I’ve never made it a secret that I would eventually like to be an owner at the top level of the sport,” Keselowski said. “And, while this is many years down the line, I want to start to prepare for that possibility now.

“Part of that preparation is seeking to develop an advanced engineering and manufacturing company that would be housed out of our 78,000-square-foot facility in Statesville (North Carolina) and ultimately help to support this vision.”

The decision to close the team came last month, Keselowski said, when he signed an extension to continue to drive a Ford for Team Penske. Many thought the lengthy contract negotiations were in part because Keselowski wanted more support from Ford for BKR.

“You always want more, but it’s a pie and there is only so much to go around. I don’t know exactly what Ford’s interests are or weren’t,” he said. “I can’t really speak to that. It wasn’t really a factor in the decision.”

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This Is The Dumb Reason We Always Vote On A Tuesday

America definitely has a lot of problems with its voting system, but one of the biggest problems is the fact we vote on Tuesdays.

It just doesnt make sense, and its part of the reason the US has low voter turnout.

We vote on Tuesdays because of a law passed in 1845, back when the US was still an agrarian society.

Tuesday was a convenient day because people traveled by horse and buggy back then, and needed at least a day to travel to get to the polls.

It also didnt conflict with days of worship (Saturday and Sunday) or market day, which was typically Wednesday.

But this law is obviously incredibly outdated.

To put this into perspective, it was passed when women couldnt vote and slavery was still alive and well.

At that point in time, there were even some white men who couldnt vote because of a property ownership requirement.

Were long overdue for a change.

Tuesday is a very inconvenient day for Americans to vote in the modern era.

Its in the middle of the week, and conflicts with peoples work schedules.

Unfortunately, we all have to make money in order to survive. On top of that, many Americans have families to attend to.

Its true early voting is available, but not in every state.

In 2016, 37 states and the District of Columbia allowed some form of early voting, but that doesnt do enough to make voting easier for Americans.

Americas voting system is in desperate need of a makeover.

There are many logical changes that should be made to Americas voting system.

Election Day should be a national holiday so Americans arent forced to choose between doing their most important civic duty and making a living.

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ESPN article dissects the feud between Jerry Jones and Roger Goodell – Blogging The Boys (blog)

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Eagles' view: “There's not a whole lot about the Cowboys' offense that scares me right now.” – Blogging The Boys (blog)

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Twitch launches Achievements and Stream Summary to help creators grow their channels

At last month’s Twitchcon, the game-streaming site Twitch’s annual conference, the company unveiled a suite of new tools for video creators on its platform designed to help them grow their online channels and make more money. Two of those tools — Achievements and Stream Summary — are today going live, the company announced this afternoon.

These two tools are specifically focused on helping creators better understand what sort of content is resonating with their audience, how it performs and track their path to becoming a Twitch Affiliate or Partner.

The Twitch Partner program has existed for some time, allowing popular video creators to monetize their channels with monthly subscriptions and ad revenue share. This past spring, the company introduced a second tier called Affiliates.

Currently, Twitch Affiliates can earn money through things like Cheering with Bits (a sort of virtual tipping mechanism), subscriptions and game sales, similar to Partners. However, they don’t have the same level of access — for example, Affiliates can’t offer custom Cheermotes and only get one Sub Emote (a custom subscriber emoticon), compared to the 50 Sub Emotes available to Partners.

For those Twitch creators who want to work their way into these higher tiers, knowing where you stand now and what’s required to move up is key.

That’s where the new Achievements feature comes in.

Starting today, streamers will see a new page on their Dashboard called “Achievements” that displays progress bars under each milestone that has to be hit before applying to either the Affiliate or Partner Program.

For example, they’ll see how far along they are on specific tasks — like “stream for 4 hours in the last 30 days” or “stream for 25 unique days in the last 30 days.” Their progress is shown as a percentage complete in addition to the progress bar.

Meanwhile, Stream Summary let creators view detailed analytics about their stream that may help them achieve various goals — like engaging fans and getting them chatting, for instance.

The summary page includes a list of various viewership stats from past streams, like number of viewers, new followers and chatters. Creators will also be able to see the top Clips from their streams, source of views and other stats that will count toward becoming an Affiliate or Partner.

Tools like these are important not only to the creators themselves, but also to the company’s bottom line. Twitch splits the revenue generated through Partners and Affiliates channels, so the more people it can push into these money-making tiers, the better.

Those programs have been growing steadily, the company also said in October.

The Twitch Affiliate Program has grown to include more than 110,000 video creators, and more than double the amount of money was paid to individual Partners in 2017, with 71 percent more money generated on average.

In total, the site reaches 15 million active daily users, and is used by over 2.2 million creators monthly. That leaves plenty of room for these programs to further expand their ranks.

Correction: The feature name is Stream Summary, not Summaries, even when plural. The story has been updated to reflect this. 

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Fake news? Google has a problem with evil unicorns – The Sydney Morning Herald

The Sydney Morning Herald

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This Sunday is a fork in the road for Cowboys head coach Jason Garrett – Blogging The Boys (blog)

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