Citation :
Finally, the way Oyo reached its $10 billion enterprise valuation -- compared to $5 billion just a year ago -- thanks to Agarwal's recent transactions with the company echoes a financial maneuver SoftBank founder and CEO Masayoshi Son has previously used to support a company's nominal value. The maneuver involves borrowing money, backed by pledged shares, that is recycled back into the company at an elevated valuation. Son himself has pledged 38% of his SoftBank Group shares to banks to borrow money that he has recycled back into SoftBank, which helps to support a high stock price. Similarly, SoftBank Group has encouraged its senior employees to borrow $5 billion from the company to be recycled to purchase company shares. In the latest iteration, Agarwal borrowed $2 billion from banks including Mizuho Financial Group and Nomura Holdings, backed by his Oyo shares. He then recycled the borrowed money in the form of $700 million of fresh equity and bought back $1.3 billion of shares from venture capital shareholders at an enterprise valuation of $10 billion.
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