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- everyone dan takashi here
- soft bank group i've been talking about
- the stock for months and months and
- months and oh man i got a new piece of
- news for you guys
- it's incredible softbank has a trading
- unit
- i didn't even know they had a trading
- unit and they're posting
- 3.7 billion and losses on
- derivatives that the financial times
- just reported
- yesterday and i want to talk to you
- about what type of options they put on
- according to this news and
- what's going on the share price as give
- you my opinion on why
- i do not think you should be holding
- softbank stock
- for your long-term portfolio for those
- of you new to my channel my name is dan
- i'm a former wall street guy former
- hedge fund guy i traveled the world and
- came back to tokyo japan recently
- just started youtube uh so would
- appreciate if you subscribe to my
- channel by pressing the button below
- going forward
- let's do a time check folks right now it
- is 6 24 p.m
- november 16th japan time first off i'm
- gonna go over the news of what came out
- and then go over the charts and
- technical positions and at the very end
- give you my opinion long term and short
- term on what i think is going to happen
- with the stock
- so first and foremost the biggest news
- that came out was this is actually
- reported by the financial times
- but it seems that softbank's new trading
- arm sb northstar this is called softbank
- northstar led by the ceo masayoshi-san
- posted uh 3.7 billion in losses in
- derivative bets on
- tech stocks financial times just
- reported this
- now rm was mostly kept secret this uh
- this trading arm
- until the financial times reported in
- september that it was making
- multi-billion
- dollar bets on tech giants through the
- summer markets rally
- the move into risky trading has raised
- concerns that eliot management
- a hedge fund thought to be softbank's
- second biggest shareholder
- and elliott is now trying to guide
- softbank into a more disciplined
- structure
- uh so basically as of year to date it
- seems that this
- new trading unit is down 3.7 billion
- dollars
- now there's a former deutsche bank
- trader who heads this unit
- uh and then there's a three person panel
- that includes sun
- ron fisher and softbank's a vice
- chairman that basically takes into
- account of what's going on
- the trading arm bought nearly 17 billion
- dollars worth of shares in tech
- giants and another 3.4 billion in stock
- derivatives by the end of september
- according to financial times while some
- of north star's more bullish positions
- gains as summer stocks
- rallied through the summer the short
- bets fueled the bulk of the quarters
- uh multi-billion dollar raw so for the
- end of the quarter according to this
- report
- for the quarter reported to uh and you
- know between
- july august september uh the bulk of the
- losses in this trading unit were
- basically because
- they were betting on this uh derivatives
- and call options
- now do note that guys there's so much
- news going on with softbank for
- more details on this please see my
- previous videos but look there's uh
- talk about them doing what's called a
- management buyout structure i don't
- think it's gonna happen please see
- i'll post my video at the end a previous
- video on why i don't think it's gonna
- happen
- uh you know obviously with their vision
- fun there's there's a lot of things
- foundering right now
- uh and also you guys just do note that
- it's not just that but there's just
- constant issues in what's going on with
- their their their board structure uh the
- financial times also just reported a few
- days ago that
- uh softbank group also just removed a
- few new
- of its board members rajiv misra after
- pressures from investors to
- improve its corporate governance as
- misra
- he left the board alongside marcelia
- clare who was the chief of
- its chief operating officer and katsunor
- sago it's chief strategy officer
- that's a lot of people it's most that's
- a big
- chunk of people leaving here that's
- that's indicating that there's problems
- going on
- uh yasir al ramayan who represented the
- saudi arabia
- arabia's public investment fund the
- largest investor in the first vision
- fund
- also left of the board so there's tons
- of people leaving the board here
- and this is coming on top of tons of
- scrutiny as to what the heck is going on
- with their bets in the vision fund which
- a lot of it is floundering
- what the chances are of what of an mbo
- is and now what's going on with this new
- trading unit and what the heck are they
- doing i mean for the most part from what
- i'm looking at here
- a lot of the bets that they made seem to
- be what they were doing was
- selling actually call options now uh
- this is according again to
- the financial times uh so it's just
- based on what they're reporting
- uh but it's saying the financial times
- reported just on uh this is just a few
- days ago
- softbank was sitting on gains of about
- four billion dollars in early september
- from these
- derivatives but then it turned into 1.3
- billion loss as of september 30th
- mostly as short call options it made as
- a hedge against the share price falling
- below a fixed price in the future were
- booked as liabilities
- now guys i am not sure as to what extent
- the financial times is
- accurate in types of the positioning
- that softbank took
- whether the short calls was part of a
- some sort of structured strategy whether
- it was a
- you know uh what's called a call spread
- or something like that
- but if the financial time is accurate
- and they were just buying
- tech stocks and then as a hedge shorting
- call
- options then to me that's
- it's not very it's almost like a casino
- betting game like uh
- i don't understand what they were doing
- so just to guys give you guys a review
- on options here
- there's four different types of options
- call options put options but you can
- sell call options and you can also sell
- put options so
- call options are the right for you to
- buy stock in the future
- put options are the right for you to
- sell stock in the future now you can buy
- these options
- but you can also sell them and as a
- result the profit and
- uh profit and loss structure looks
- differently so for call option here as
- you can see on the top
- left here if you buy here and you
- negotiate the price that you're going to
- buy in the future this is your strike
- price
- you start off with a loss because you're
- paying the premium
- and then as the stock price goes up you
- start making money
- the put option is the opposite where the
- strike price is here you negotiate in
- the future to sell at a certain price
- you pay a premium for it and then as the
- stock price goes down you guys
- start making money now what softbank did
- according to the ft was
- short call options so it looks like it
- what was doing it was this one it was a
- short
- call so the profit structure looks like
- this it's extremely
- dangerous the reason why your downside
- is
- infinite of all these four types of
- options this is an
- infinite downside structure as in right
- here if the stock price keeps going up
- and up and up and up and up
- you are have an infinite amount of
- losses basically because somebody has
- the right to buy from you
- so the higher the stock price goes up
- you have to pony up
- basically amount to o to the person
- who's buying the call options
- so it's a very risky investment
- structure um
- no doubt it is more profitable because
- you're collecting premiums from the
- from the beginning but it's kind of a
- gambling structure and
- again i don't know all the details as to
- what they're doing but i think that this
- is
- highly negligent uh in terms of
- softbank's even website page
- there's just very little detail about
- what the heck this northstar group is
- you know even looking at the softbank
- website uh it just says
- sp northstar lp so it's a limited
- partner group but again
- this company is turning more into like a
- gigantic
- investment fund it has been for a while
- and
- betting on you know obviously alibaba
- made it very very famous because it was
- such an
- amazing investment uh so that gave
- massachusetts on a lot of credibility
- but now what it's doing i think on these
- options
- deserves a lot of scrutiny so now let's
- go into some of the charts as to what's
- going on in the softbank
- uh stock here so i have been sort of
- looking at softbank stock
- both as softbank group and softbank
- mobile dude guys
- please do not uh you know get confused
- between the two the softbank
- group is the conglomerate which owns
- everything and then softbank mobile
- is just the telecom unit so don't get
- confused between those two as usual guys
- when looking at the charts
- please see my previous videos in the
- description area if you're confused on
- all the lingo i'm using such as macd
- bollinger bin rsi
- etc so let's look at the chart on
- softbank group this is 9984
- now looking 9984 the softbank group here
- first officer
- we've seen that it's sort of started
- sort of starting to curve down a little
- bit here uh
- the volume is quite low right now uh you
- know indicating
- what we see here in march that oh sorry
- guys this is the weekly chart here
- let's go back to the daily sorry guys
- amateur move let's go to the daily chart
- here
- daily chart here we see here that the
- volume is quite low recently it was
- quite high
- in september when there were all the
- news in the press about
- how they were making all these
- derivative bets the ft was calling them
- the nasdaq whale but we just didn't have
- that much detail
- now we have this detail that will have a
- lot more detail reporting 3.7 billion
- dollars in losses
- that's not a small amount even for a
- company like softbank that's not a small
- amount to be losing at all
- uh now we're seeing this chart here it's
- almost looking like a big
- m pattern to me like one two three
- and four if this is an m pattern and
- this is moving down
- that would be quite bearish in my
- opinion now looking at the volume right
- now
- volume is quite low so not really
- indicating that something special is
- going on the macd is still in a decline
- phase
- uh that has started since october 22nd
- and rsi is also in a decline phase at
- the moment
- the bollinger band is sitting in the
- middle of his band so nothing really
- special at the moment
- at all uh what i want to do note with
- softbank right now is what is it trading
- with
- uh and what's interesting is looking at
- softbank right now
- it's not trading really at all with
- softbank mobile 9434
- this is the telecom unit uh and then
- looking where if you compare it with
- let's say
- how is it trading with let's say some of
- the big indices like uh let's say the
- topics here
- not really trading at all with the
- topics uh looking at the nikkei
- not really trading at all with the
- nikkei so softbank is in its own little
- world
- not really trading with anything at the
- moment interestingly
- uh let's see if it's trading with let's
- see the nasdaq here
- next
- it's okay and it's not even trading with
- the nasdaq softbank group is in its own
- little world right now it's highly
- uh uncorrelated with any asset
- indicating to me
- that uh it's sitting in its own world
- and it's probably
- reacting more of its micro news than it
- is to macro news so whatever is going on
- with uh trump versus biden versus the
- corona vaccine versus what's going on
- the tech market
- it doesn't really care it's just doing
- its own thing and again guys just
- looking at softbank in terms of just a
- short interest ratio on the adrs
- it usually moves pretty similar to the
- local stock but it's nothing really
- normal it's nothing really special at
- the moment either
- okay so listening to all of this what is
- my recommendation for you and what i
- think you should do with softbank stock
- going forward and guess guys as usual
- investment is self-responsibility please
- make your own decisions at the end of
- the day
- and please divide your investment up
- into long term this is for your
- retirement account
- and short term you really want to have
- both and differentiate because the two
- are very different strategies and you
- can lose a lot of money
- even if you're investing wisely for long
- term it could all go put
- down when there's a big coronavirus
- crash but your short term strategy will
- save you there because you're catching a
- lot of trends
- um today's investment is look i'll give
- you an update both long term and short
- term long term wise
- i do not think you should be putting
- softbank into your portfolio here now
- again we don't have a lot of detail but
- the fact that there's a lot of board
- members leaving
- those board members know more than we do
- they know way more they're insiders they
- know what's going on
- they know more than that financial times
- they know more than me and they know
- more than you
- and they are leaving something is going
- on
- so that's a bad indicator these tech
- stocks and what they're doing
- i don't know completely what they're
- deemed but if they're selling call
- options
- that's a very gambler's trade i don't
- like that at all that's
- that that doesn't seem that that seems
- more like a casino play than it is to me
- a well-managed conglomerate company that
- is supposed to be
- uh investing into uh new tech funds
- uh two new tech companies as opposed to
- just uh you know
- coming up with a trading unit and being
- like a hedge fund
- so i don't recommend this at all it
- doesn't seem like it's well managed i
- don't think an mbo will happen
- uh see my previous video i'll put it at
- the end of the screen short term wise
- i'm still gonna stick with
- the same bet that i have before which is
- guys short
- softbank group and buy softbank mobile i
- still
- like this i still like this chart uh
- this is something that i've been
- recommending and it's been so far been
- been about a 10 11
- gain i recommended it right around here
- or so when the macd started to turn this
- is
- cell 9984 by 9434
- and the spread i think still has room to
- go down it's about 11
- trade so far and i think it'll continue
- to go down mainly because
- look softbank group the macd is going
- down the trend is going down and
- softbank mobile the trend is going up so
- it's two usually pretty high correlated
- stocks
- but right now they're not highly
- correlated which makes it a great unique
- opportunity
- to put on this very low risk trade and
- that's the key to this trade is
- it's i think it's quite low risk and the
- trend is in your favor
- so that's my recommendation for short
- term and long term
- i do not think you should buy this for
- your retirement account thanks guys for
- watching my video hopefully you enjoyed
- the content if you did please press the
- like button below
- and please subscribe to my channel by
- subscribing to the button going forward
- thanks again guys have a great day have
- a great night and
- take care
-
everyone dan takashi here
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