Molson Hart

15) Great investment decisions are obvious only in retrospect. If they were obvious at the time, valuation would’ve been different. The internet wasn’t obvious in 1996, Chinese e-commerce wasn’t obvious in 2000, the iPhone wasn’t obvious in 2007/2008.

16) Five great decisions – starting Yahoo Japan, holding Yahoo Japan, buying BABA, holding BABA and betting on the iPhone – are the foundation of Masa’s track record. Most great investment track records are built on a similar number of decisions.

17) However, investing isn’t like sports. Once you’ve won a championship, it is yours forever. Superb investment track records are different – they can be lost/irrevocably damaged. And Masa may – or may not - be in the process of losing his. Time will tell.

18) On that note, it doesn’t look like the VF marked Didi and its other ridesharing/delivery portfolio co’s where mutual funds required to accurately price their holdings based upon public comps marked them. Unclear who is right, btw - just an observation. Marks are hard.

19) Marked in line with mutual fund marks, the Vision Fund is likely running a mid to high single digit overall IRR. Up 10% to 15%ish vs. the Nasdaq up more than 35% over the same time. And serious risk to the ARM franchise/valuation from RISC-V. License sales down 30% this q

20) A mid to high single digit overall IRR would imply that the Vision Fund common equity is likely running a negative IRR given the 7% preferred return.

21) All of this will be ok for the investors in the preferred stock of the Vision Fund. They will get at least a 7% return and stakes in lots of great co’s even in a bear case. The common equity in the VF fund will feel the pain if there is any.

22) X factor is Sprint/T-Mobile - if it isn’t approved, unclear that Masa and SoftBank will be able to invest in VF2 given all the layers of leverage. Masa/SoftBank being able to invest in VF2 is critical – it’s not happening without a significant contribution from them.