In this article, we’ll examine billionaire Masayoshi Son’s portfolio management strategy and approach to investing in stocks. We’ll also check out Mr. Son’s top 10 stock picks.
Softbank’s chairman and CEO Masayoshi Son has been making headlines for the past decade thanks to his eye-popping investments in startups. After the initial success of Softbank’s $100 billion tech-focused Vision Fund, Mr. Son’s Japanese conglomerate established Vision Fund 2 in 2019, with an aim to invest in companies engaged in artificial intelligence technologies. After enjoying robust gains over the past couple of years, the Japanese conglomerate suffered a $3.5 billion loss for the September quarter of 2021, followed by a 97% year-over-year decline in profits for the December quarter.
The losses were blamed on the substantial share price declines of several key portfolio tech companies, including Coupang, Inc. (NASDAQ:CPNG), Alibaba Group Holding Limited (NYSE:BABA), DiDi Global Inc. (NYSE:DIDI), and several new startups. Coupang, Inc. (NASDAQ:CPNG) debuted on the NASDAQ last year and is currently trading below its IPO price. Alibaba Group Holding Limited (NYSE:BABA) is one of billionaire Masayoshi Son’s worst-performing stock holdings over the past 12 months, as its shares have plunged 60% in the last year. As of December 2021, the Japanese conglomerate owned a 25% stake in Alibaba Group Holding Limited. Shares of Chinese ride-hailing giant DiDi have performed even worse, losing 71% of their value in the last year.
The Japanese billionaire also invests in companies through SB Management, a wholly-owned subsidiary of Softbank. When compared to his Vision Funds, SB Management is relatively small, with just over $1 billion in assets held in its 13F portfolio as of December 31, 2021. SB management invests in emerging companies and has primarily spread its investments across three sectors: healthcare, technology, and finance.
The firm’s top 10 stock holdings include Lyell Immunopharma, Inc. (NASDAQ:LYEL), Revolution Healthcare Acquisition Corp. (NASDAQ:REVH), Sana Biotechnology, Inc. (NASDAQ:SANA), Compute Health Acquisition Corp. (NYSE:CPUH), and Sema4 Holdings Corp. (NASDAQ:SMFR). SB Management’s top 10 stock picks are all small-cap stocks. The upside growth potential of small-cap stocks is significantly greater compared to that of larger ones. Small-caps also have a good chance of being acquired by large companies for an attractive premium.
Masayoshi Son of SB Management
Our Methodology:
We made use of SB Management’s 13F portfolio data for this analysis based on the fund’s latest 13F filing with the SEC. The following is the list of top 10 stock picks of Japanese billionaire Masayoshi Son.
Japanese Billionaire Masayoshi Son’s Latest Portfolio: Top 10 Stock Picks
10. Lyell Immunopharma, Inc. (NASDAQ:LYEL)
SB Management’s Stake Value: $27 million
Percentage of SB Management’s Portfolio: 2.67%
Number of Hedge Fund Holders: 10
SB Management has been holding a stake in Lyell Immunopharma, Inc. since its debut on the NASDAQ in the second quarter of 2021. Like Coupang, Inc., DiDi Global Inc., and Alibaba Group Holding Limited, shares of Lyell Immunopharma, Inc. have fallen significantly over the past two quarters.
Despite the sharp decline, the Japanese billionaire has left his position in the company unchanged during the past two quarters. SB Management is the leading hedge fund stakeholder of Lyell Immunopharma, Inc. in our database as of December 2021. Several other elite funds, including Millennium Management and Citadel Investment Group, were also among the major stakeholders in the company.
Lyell Immunopharma, Inc. specializes in T-cell therapies that have the potential to cure patients with solid tumors. Its product pipeline of T-cell therapies is composed of multiple candidates, including LYL845 for multiple solid tumors, LYL797 for triple-negative breast cancers, and NY-ESO-1 for synovial sarcoma.
Although shares of Lyell Immunopharma, Inc. have been under pressure over the past few quarters, market analysts appear to be optimistic about the company’s future outlook. Goldman Sachs has set a bullish price target of $31 for Lyell Immunopharma, Inc., representing significant upside from the current price of $6.50 per share. Wall Street analysts’ consensus price target for the biotechnology company is $22.
9. Revolution Healthcare Acquisition Corp. (NASDAQ:REVH)
SB Management’s Stake Value: $29.22 million
Percentage of SB Management’s Portfolio: 2.88%
Number of Hedge Fund Holders: NA
Revolution Healthcare Acquisition Corp. has been a member of SB management’s portfolio for the past three quarters. As of the end of December, the firm held a $29.22 million stake in Revolution Healthcare Acquisition Corp., accounting for 2.88% of its 13F portfolio’s value. Shares of Revolution Healthcare Acquisition Corp. have been under pressure since its debut on the NASDAQ in the first quarter of 2021.
Revolution Healthcare Acquisition Corp. is engaged in acquiring assets and businesses through acquisitions, mergers, share purchases, or similar business combinations. The company focuses on finding investment opportunities in the life sciences, healthcare, and technology industries.
8. Sana Biotechnology, Inc. (NASDAQ:SANA)
SB Management’s Stake Value: $34.1 million
Percentage of SB Management’s Portfolio: 3.38%
Number of Hedge Fund Holders: 11
As he is with Coupang, Inc., DiDi Global Inc., and Alibaba Group Holding Limited, Japanese Billionaire Masayoshi Son is one of the leading stakeholders in Sana Biotechnology, Inc.. SB Management has been holding a stake in Sana Biotechnology, Inc. for the past four quarters. The number of long hedge fund positions in Sana Biotechnology, Inc. was 11 as of December 31. Along with SB management, Woodline Partners and Harvard Management Co were among the leading stakeholders in the company.
Sana Biotechnology, Inc. is engaged in creating and delivering engineered cells as treatment options for patients. In 2022, Sana expects to file investigational new drug applications for multiple product candidates, including SC291 (CD19).
Shares of Sana Biotechnology, Inc. have also underperformed since its debut on NASDAQ in the first quarter of 2021. The company’s stock is down close to 80% from its IPO price and its market cap is currently hovering at just over $1 billion.
7. Compute Health Acquisition Corp. (NYSE:CPUH)
SB Management’s Stake Value: $38.9 million
Percentage of SB Management’s Portfolio: 3.84%
Number of Hedge Fund Holders: 66
SB Management is bullish over the fundamentals of Compute Health Acquisition Corp., owning 4 million shares of the company as of December 31, accounting for 3.84% of its 13F portfolio’s value. The firm has left its stake in the company unchanged over the past three quarters. Shares of Compute Health Acquisition Corp. have also struggled to generate upside momentum over the past few quarters.
Of the 924 hedge funds tracked by Insider Monkey that filed 13Fs for the December quarter, Compute Health Acquisition Corp. was in 66 of their portfolios as of December 31. Aristeia Capital was the largest stakeholder in the company, while SB management ranked second on the list.
Compute Health Acquisition Corp. invests in businesses and assets through mergers, acquisitions, stock purchases, or similar business combinations. The company mainly focuses on healthcare businesses and companies in the medical device space, including robotics and imaging.
6. Sema4 Holdings Corp. (NASDAQ:SMFR)
SB Management’s Stake Value: $40.2 million
Percentage of SB Management’s Portfolio: 3.97%
Number of Hedge Fund Holders: 42
Sema4 Holdings Corp. is also a member of Masayoshi Son’s top 10 stock picks, with the fund holding a stake in Sema4 Holdings Corp. for the past two quarters. Shares of Sema4 Holdings Corp. are down around 80% over the past 12 months and currently trade around $3.
Founded in 2017, Sema4 Holdings Corp. is an AI-driven genomic and clinical data intelligence platform company. It recently earned a place on Fast Company’s list of the world’s most innovative companies. In the data science category, Sema4 was ranked among the top three most innovative companies.
The company appears to be in a strong growth phase which could support its share price in the long run, as Sema4 Holdings Corp. has generated double-digit revenue growth over the past couple of quarters. Moreover, the company’s aggressive growth strategies should further bolster its financial numbers in the years ahead. Sema4 Holdings Corp. plans to acquire GeneDx to strengthen its AI-driven genomic and clinical data platform. The business combination is likely to generate $350 million in pro forma revenue in 2022.
Elite funds also appear bullish over the fundamentals of Sema4 Holdings Corp.. The number of hedge funds with long positions was 42 as of December 31 compared to 40 in the previous quarter. Deerfield Management was a leading stakeholder in the company with a holding worth $62 million, while SB Management was ranked second.
Compared to Coupang, Inc., DiDi Global Inc., and Alibaba Group Holding Limited, Sema4 Holdings Corp. (NASDAQ:SMFR) is a small company, with a market cap of around $600 million.
5. SIGNA Sports United N.V. (NAYSE:SSU)
SB Management’s Stake Value: $42.4 million
Percentage of SB Management’s Portfolio: 4.19%
Number of Hedge Fund Holders: 11
Masayoshi Son’s SB Management initiated a brand new position in SIGNA Sports United N.V. (NAYSE:SSU) during the fourth quarter of 2021. SIGNA operates a well-known sports e-commerce and tech platform in Europe, which includes products related to bikes, tennis, and outdoor and team sports. SIGNA generated €213 million ($235.8 million) of revenue in the December quarter, up 11% from the year-ago period. Furthermore, its active customers topped the 7.4 million level, representing an increase of 76% year-over-year.
4. Learn CW Investment Corporation (NYSE:LCW)
SB Management’s Stake Value: $101 million
Percentage of SB Management’s Portfolio: 10%
Number of Hedge Fund Holders: NA
Learn CW Investment Corporation (NYSE:LCW) is also a newcomer to SB management’s stock portfolio. The firm bought a stake valued at more than $101 million in the company during the December quarter, accounting for 10% of its 13F portfolio’s value. The market capitalization of Learn CW Investment Corporation is currently hovering below the $200 million level and its stock has remained volatile since its debut on the NASDAQ in the fourth quarter of 2021.
Learn Capital was founded in 2008 and focuses exclusively on early-stage and mid-stage investments in the global education sector.
3. AbCellera Biologics Inc. (NASDAQ:ABCL)
SB Management’s Stake Value: $140 million
Percentage of SB Management’s Portfolio: 13.88%
Number of Hedge Fund Holders: 18
SB Management looks bullish over the future fundamentals of AbCellera Biologics Inc. (NASDAQ:ABCL). The firm first invested in the company during the December quarter of 2020, lifted its stake further in the March quarter, and has since left its stake unchanged. The Vancouver, British Columbia-based company is researching and developing human antibodies.
Of the 924 13F-filing hedge funds tracked by Insider Monkey, AbCellera was in 18 portfolios as of December 31, down from 21 positions in the previous quarter. Baker Bros. Advisors was a leading stakeholder in the company.
2. Pacific Biosciences Of California Inc. (NASDAQ:PACB)
SB Management’s Stake Value: $166 million
Percentage of SB Management’s Portfolio: 16.49%
Number of Hedge Fund Holders: 21
Pacific Biosciences Of California Inc. (NASDAQ:PACB) is the second-largest stock holding in SB Management’s 13F portfolio according to its latest quarter filing. The number of long hedge fund positions in Pacific Biosciences has declined for three straight quarters according to data tracked by Insider Monkey. As of December 31, Pacific Biosciences was in 21 hedge funds’ portfolios.
Founded in 2004, Pacific BioSciences is engaged in developing and manufacturing systems for gene sequencing. The company’s share price is down close to 70% over the past 12 months.
1. EQRx, Inc. (NASDAQ:EQRX)
SB Management’s Stake Value: $294 million
Percentage of SB Management’s Portfolio: 29.11%
Number of Hedge Fund Holders: 31
Japanese billionaire Masayoshi Son’s SB Management bought a huge stake in EQRx, Inc. (NASDAQ:EQRX) upon its NASDAQ debut in the December quarter. The firm purchased 43.17 million shares of the company valued at around $294 million as of December 31, accounting for a sizable 29% of the value of its 13F portfolio.
The company aims to build a portfolio of innovative, low-cost treatments and develop unique long-term collaborations with other key industry players. There are two pre-registrational oncology assets (sugemalimab and aumolertinib) in EQRx’s pipeline that have demonstrated positive Phase 3 data for the treatment of advanced non-small-cell lung cancer.
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Disclosure: None. Japanese Billionaire Masayoshi Son’s Latest Portfolio: Top 10 Stock Picks is originally published on Insider Monkey.
