The VC Bubble Just Burst: Soft Bank's Top 2 Investors Complain About Overpayment For Tech Companies
After venture capital spending hit an all-time high in 2018, evidence that the VC bubble may finally be about to burst has continued to mount, just as some of Silicon Valley's most overvalued tech darlings have been preparing for their long-anticipated public offerings.
And in the latest sign that Silicon Valley's latest crop of unicorns could be headed for a brutal "down round", the Wall Street Journal reported on Monday that the two biggest backers of Soft Bank's $100 billion Vision Fund (the Japanese telecoms conglomerate/VC giant and the Bay Area tech scene's most reliable marginal investor) have been complaining about the high valuations at which it has invested in some of its holdings.
In addition to being one of Uber's largest shareholders, with a $9.3 billion stake, the Vision Fund has also invested in WeWork, dog-walking service Wag, GM Cruise and DoorDash among its investments, according to ReCode.
The backers in question are Saudi Arabia's Public Investment Fund and Abu Dhabi’s Mubadala Investment Co, who together have contributed roughly two-thirds of the Vision Fund's capital. Should they balk at the relationship, it could spell trouble for any deals that the fund has planned, because according to the most recent reports, Vision has only deployed about $60 billion of its $100 billion in capital, and reportedly has about 20 deals in the pipeline.
While Soft Bank's chairman Masayoshi Son and the Saudis have maintained a cordial relationship, at least in public, the reports of the Saudis dissatisfaction with the Son and his management style isn't all that surprising. The FT reported earlier this year that Soft Bank had abruptly scaled back plans to increase its stake in WeWork by $16 billion. The fund ended up investing another $2 billion, one-eighth of the originally planned investment.
Apparently, the WeWork investment wasn't the only deal to collapse in recent months. Plans for Soft Bank to increase its investment in Hong Kong-based AI startup SenseTime in a joint $1 billion investment with Mubadala.
Soft Bank had invested several hundred million dollars into SenseTime last fall, bringing the company’s valuation to about $7.7 billion, according to people familiar with the deal. The Vision Fund then considered making a joint $1 billion investment with Mubadala in SenseTime, as part of a potential fundraising round that could value the company at $10 billion, according to people familiar with the matter.
The deal never came together after Mubadala backed away in recent weeks, people familiar with the matter said. The fund balked at what it considered a high valuation target, a person briefed on the matter said.
Some Vision Fund employees also considered the valuation to be high, some of the people said. SenseTime rival Megvii Technology Inc. is currently raising funds at a $3.5 billion valuation, according to people familiar with the matter.
SenseTime and Mubadala said they weren’t aware of any potential co-investment by the Vision Fund and Mubadala, and SenseTime said it never launched a $1 billion financing round at a valuation of $10 billion.
rest at link
https://www.zerohedge.com/news/2019-02-18/vc-bubble-just-burst-softbanks-top-2-investors-complain-about-overpayment-tech
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Now they bitch about over-valuation when they have no one to sell the bloated POS's they bought.
Was fine when they had an unlimited supply of money. Eat shit fucker's!
AUTO INDUSTRY LINES UP AGAINST POSSIBLE US TARRIFS
WASHINGTON (Reuters) - The U.S. auto industry urged President Donald Trump's administration on Monday not to saddle imported cars and auto parts with steep tariffs, after the U.S. Commerce Department sent a confidential report to the White House late on Sunday with its recommendations for how to proceed.
Some trade organizations also blasted the Commerce Department for keeping the details of its "Section 232" national security report shrouded in secrecy, which will make it much harder for the industry to react during the next 90 days Trump will have to review it.
"Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs," the Motor and Equipment Manufacturers Association said in a statement, adding that it was "alarmed and dismayed."
"It is critical that our industry have the opportunity to review the recommendations and advise the White House on how proposed tariffs, if they are recommended, will put jobs at risk, impact consumers, and trigger a reduction in U.S. investments that could set us back decades."
Representatives from the White House and the Commerce Department could not immediately be reached.
The industry has warned that possible tariffs of up to 25 percent on millions of imported cars and parts would add thousands of dollars to vehicle costs and potentially devastate the U.S economy by slashing jobs.
Administration officials have said tariff threats on autos are a way to win concessions from Japan and the EU. Last year, Trump agreed not to impose tariffs as long as talks with the two trading partners were proceeding in a productive manner.
"We believe the imposition of higher import tariffs on automotive products under Section 232 and the likely retaliatory tariffs against U.S. auto exports would undermine - and not help - the economic and employment contributions that FCA, US, Ford Motor Company and General Motors make to the U.S. economy," said former Missouri Governor Matt Blunt, the president of the American Automotive Policy Council.
Some Republican lawmakers have also said they share the industry's concerns.
https://www.marketscreener.com/news/Auto-industry-lines-up-against-possible-U-S-tariffs–28027365/?countview=0
there it is!!!