Why does Yusaku Maezawa sell his stocks to Yahoo? Each party's motives and the future course of events
Yahoo Japan (4689) announced that it would make a tender offer (TOB) for ZOZO (3092). If all goes smoothly, ZOZO will become a consolidated subsidiary of Yahoo. With Masayoshi Son of ZOZO holding 36% of its shares selling 30%, the deal is regarded as highly likely to go through.
Even though rich, Masayoshi Son was “short on cash”
The TOB price is 2,620 yen. Following the announcement, both companies’ stock prices rose.
I was also surprised by this announcement. In particular,the fact that Masayoshi Son would sell his shares and resign as ZOZO president is like a bolt from the blue.
Masayoshi Son’s recent lavish spending stood out. He bought expensive paintings, dispersed cash on Twitter, and even bought a space trip—an extravagant display unimaginable to ordinary people.
However, many founders’ sources of funds come from bank loans backed by their company’s stock. ZOZO’s stock price had been weak recently, so banks would demand additional collateral,making it possible that Masayoshi Son was “short on cash” despite being wealthy.
Large blocks of their own stock are not easy to sell. Selling could push the stock price down and provoke negative speculation from investors once the sale becomes known.In that situation, Yahoo’s offer to buy the stock was like a lifeline that came at the perfect time.
Shopping business that dragged down the performance — a “kill-or-cure” strategy
For Yahoo, too, this acquisition is a desperate measure to turn things around. Until now, the company had been pushing the shopping business by offering free store fees, butprofits had not risen and the business had been dragging down performance.
The shopping business failed to take off due to competition with Rakuten and Amazon, as Yahoo could not establish a distinctive position. In the end,costs ballooned due to large volumes of point rewards.
Will eliminating the “Masayoshi Son risk” spur growth?
On the other hand, for ZOZO, this doesn’t seem like a bad development.
The direct sale of shares is largely driven by Masayoshi Son’s finances, but strategically, the “Masayoshi Son risk” had grown. His extreme statements have invited controversy, and ZOZO’s suit problems and a bespoke discount system were causing retailers to leave.“Masayoshi Son risk”.
Personally, I think apparel online shopping is still in its early days, and what ZOZO needs is not gimmicks but a standard, which I believe isthe orthodox path, not flashy tricks. However, due to Masayoshi Son’s distinctive character, he may not be easily satisfied with ordinary things.
By handing the reins to Yahoo, which has led Japan’s internet society, I believe ZOZO can pursue steady growth.
Yahoo, where are you rushing to?
One thing that concerns me is Yahoo itself.
Originally, it’s a company that should not have to worry about anything as a portal site, but recently it seems to be spending a lot on shopping and PayPay,giving the impression that it is desperately trying to spend money.
Then it proceeds to acquire ZOZO for 400 billion yen. Financially, there is no problem, butI get the sense, “Where are you going so fast?”.
Probably SoftBank’s Masayoshi Son is pushing them. It is moving in a VC-like fashion similar to the Vision Fund.Perhaps it would be better not to view it as the old Yahoo.
