SoftBank Sells Another $2 Billion of DoorDash Stock

This is an English adaptation of a FoodBud historical article originally published on November 2, 2021.

SoftBank Group’s Vision Fund sold about $2 billion worth of DoorDash shares on October 27, according to a filing received by the U.S. Securities and Exchange Commission. It was SoftBank’s third reduction of its DoorDash stake in six months.

Earlier in 2021, the Vision Fund sold $1 billion of DoorDash stock in May and another $2.2 billion in August.

The Latest Transaction

In the latest sale, SoftBank Vision Fund sold 10 million DoorDash shares at $202.815 per share.

After the sale, SoftBank still held 33.6 million DoorDash shares, equal to about 11% of the company. That remaining position was a little more than half of what SoftBank held when DoorDash listed in December 2020. DoorDash shares fell 8.9% the previous week, closing at $194.80.

Why SoftBank Was Selling

Analysts said selling listed-company holdings such as DoorDash, and borrowing against pledged shares, could help SoftBank Vision Fund return capital to its limited partners. Borrowing against shares could also avoid capital-gains tax while allowing SoftBank to retain exposure to any future appreciation in the holdings.

Venture funds typically exit after portfolio startups go public, then distribute proceeds to investors.

Masayoshi Son had long been known for being reluctant to cash out investments, but SoftBank had recently shown more willingness to sell holdings to fund the Vision Fund’s faster dealmaking pace. In the second quarter of 2021, SoftBank sold about $14 billion of listed-company shares, nearly triple the amount sold in the first quarter.

Over the previous six months, SoftBank sold large positions in companies including DoorDash, South Korean e-commerce group Coupang, and Chinese online real-estate platform Beike.

Media reports said the rationale behind SoftBank’s selling was similar to the DoorDash sale: funding faster investment activity by the Vision Fund, increasing returns to fund investors, and strengthening its capacity to invest in startups.

More Startup Investing, More Borrowing

At the same time as it sold existing holdings, SoftBank Vision Fund accelerated investments in other technology startups. In the second quarter alone, it invested $15 billion in private startups, with about half of that funded by proceeds from share sales.

SoftBank was also diversifying geographically and had begun focusing more on Japan. Media reports said the Vision Fund had recently invested in Japanese biotech startup Aculys Pharma, its first investment in a Japanese company.

As its need for cash increased, Masayoshi Son also borrowed billions of dollars against Vision Fund holdings. Regulatory filings showed that SoftBank Vision Fund obtained two equity-pledge loans in September 2021. In one financing, SoftBank pledged almost all of its $15 billion stake in South Korean e-commerce group Coupang. In another, SoftBank pledged DoorDash shares, though the number of shares was not disclosed.

Sources said the equity-pledge loans helped SoftBank pay distributions to the fund’s backers, including sovereign wealth funds from Saudi Arabia and Abu Dhabi, as well as SoftBank Group itself.

Note: IPO, shareholding, sale, borrowing, and valuation-related figures are historical as of the original November 2, 2021 article.