SoftBank – The Best Tech Company You’ve Never Heard of

October 6, 2014

By MoneyMorning.com.au

Have you ever seen the movie Shrek? Or how about Shark Tale? Madagascar? Surely, you’ve seen Kung-Fu Panda.

I’m going to assume you’ve seen at least one of them. They’re all animated films. Each enjoyed huge box office success. The first three Shrek movies grossed $2.23 billion worldwide.

DreamWorks Animation is behind the success of these films.

It’s a massive business, and everything they release seems to be movie genius.

It might surprise you that DreamWorks is on the NASDAQ under the ticker DWA.


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DreamWorks is a strong company financially. Their last four financial years have each seen over $700 million in revenue.

The company’s current market cap is around $1.89 billion, and their share price at close on Friday was $22.36.

One company believes DreamWorks is worth even more. Specifically, this company values DreamWorks at about $2.5 billion.

In other words, this company wants to buy DreamWorks Animation for a reported $32 a share…about a 45% premium to its current price.

Who wants to buy DreamWorks?

The interested company is SoftBank [TYO:9984]. You’ve probably never heard of SoftBank before. But you should have, because they’re possibly the best tech company in the world.

The SoftBank group is worth about 9.56 trillion Japanese yen (about AU$100 billion).

Founded in 1981, SoftBank has been growing strongly for over three decades.

SoftBank seems to be keen on buying parts of big companies. What I mean by that is they own big chunks of some big global companies. For example, SoftBank own large holdings in the Japanese subsidiaries of Yahoo!, E-Trade and Morningstar.

One of SoftBank’s biggest purchases came just last year. After beginning negotiations in 2012, SoftBank closed a deal to buy Sprint Nextel for $21.6 billion in 2013.

All of a sudden, SoftBank became a serious global player in telecommunications. But again, that’s not all the company has their hands in.

SoftBank also own 36.3% of Alibaba Group [NYSE:BABA]. Add to that 42.2% of Renren Inc. [NYSE:RENN] and 54.9% in Supercell, the huge online gaming company.

While we recognise that the addition of DreamWorks Animation to the group will be huge, it’s another company SoftBank owns that really excites us.

Robots set to rule the home

We recently told to you about a new wave of consumer technology. It’s set to make the smartphone look unexceptional. I believe this technology will create more opportunity and wealth for investors than any other technology trend ever before.

We’re talking about consumer robots. Home robots. Not the Roomba. The robots I’m talking about will work with you and your family as though they are a family member.

The first wave of home robotics is set to hit the market as early as February next year.

That’s the release date of a robot called ‘Pepper’. Aldebaran Robotics makes Pepper. The company is the brainchild of robotics pioneer Bruno Maisonnier.

I’ve seen other robots from Aldebaran with my own eyes. I’ve played with and even helped to train an Aldebaran robot at a few of the tech events I’ve been to over the last year or so.

And in December this year, I’ll be visiting Aldebaran’s Atelier shop in Paris. There I’ll get some one-on-one time with Pepper, the home robot, before it comes to market in February.

If you could invest in Aldebaran, then I’d tipping that you do so. But unfortunately, Aldebaran is a private company, so you can’t buy stock in your trading account.

I think Aldebaran is one of the best companies in the world. And SoftBank agrees.

I always assumed Aldebaran had done things on its own. But in 2012, it came to light that Softbank saw the future and snatched around 80% of Aldebaran for $100 million.

SoftBank’s exact ownership is 78.5%. So Bruno Maisonnier still owns a sizable chunk. But now, after a few years of preparation, things are really set to take off for Aldebaran.

Since SoftBank joined the party, over 5,000 NAO robots have made their way into the world. And this February Pepper will find its way into homes.

Aldebaran and SoftBank are set to completely change the way we think about home robotics.

With the backing of SoftBank, Aldebaran could grow into the world’s most dominant consumer robotics company.

Of course, as SoftBank is Japanese, this will all kick off there first. But we’ll still be able to buy a Pepper at some stage next year. You can have your very own Pepper for about $2,000, less than a full spec MacBook…

Aldebaran — along with the possibly of DreamWorks Animation — under the SoftBank roof is exciting. It takes SoftBank into two all new areas of future potential growth.

Internet, telecommunications, multimedia and robotics — these are each key industries of the next few decades, and SoftBank has a big slice of the pie in each. SoftBank might just be the best tech company you’ve never heard of.

Regards,

Sam Volkering +
Editor, Tech Insider

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By MoneyMorning.com.au