THE MOMENT ITS LENDERS PANIC, SOFTBANK WILL QUICKLY COLLAPSE UNDER ITS MASSIVE PILE OF DEBT

This is the article, free of ads, that I just published on my public blog: https://justdario.com/2026/11/the-moment-its-lenders-panic-softbank-will-quickly-collapse-under-its-massive-pile-of-debt/

SoftBank Group shares closed up 14% today ahead of earnings, thanks to a combination of retail euphoria and the punctual short squeeze that more often than not occurs when the company of Masaponzi son is about to drop very bad news. Punctually, the bad news dropped today, after trading in Japan had closed for the day.

Wall Street analysts expected SoftBank to report a JPY 129.32 billion profit today; the company instead reported a JPY 1.12 trillion loss. That loss would have been even larger if SoftBank had not reported a JPY 1.06 trillion gain on its Intel shares as of the 30th of September. From the end of September until today, Intel shares have already LOST ~50% of their value, something SoftBank management was surely aware of, but they still booked a chunky gain to make SoftBank's latest earnings look a bit less disastrous.

What is really troubling about SoftBank is how its total valuation now rests on objectively fictitious numbers not updated since the AI bubble peak euphoria a few months ago.

• SoftBank Group's market cap as of today is the equivalent of USD 140 billion
• SoftBank estimates the “fair value” of its OpenAI stake at USD 99.6 billion (including a USD 45 billion gain)
• ARM Holdings’ total market cap is USD ~200 billion, of which SoftBank still nominally controls ~90% of the shares (nominally because a good chunk of those have been pledged as collateral against margin loans). This means that SoftBank’s ARM stake is worth USD ~180 billion.

I know your jaw must have dropped after seeing these numbers, but no, they are all correct, and the math does not lie: SOFTBANK MARKET CAP IS ALREADY USD ~100 BILLION LOWER THAN THE VALUE OF ITS LARGEST TWO PORTFOLIO HOLDINGS COMBINED.

This either means that SoftBank is an extremely undervalued stock, considering it has more investments and subsidiaries; that the “true value” of its holdings is much lower; or that SoftBank has a MASSIVE debt problem, and the value of its shares already reflects that many of its assets no longer belong to SoftBank because banks will start taking control of that collateral and liquidate it in the market to cover the loans they provided to Masaponzi son's holding company.

Let me cut to the chase: SoftBank has a massive debt problem. However, banks are still not forced to deal with it. From the banks’ perspective, SoftBank is a great customer that, with its investment activity, trading, bond issuance, and borrowings, generates a ton of fee business for them every year. Understandably, they have no incentive to kill their golden goose unless it stops laying eggs. But SoftBank borrowed so much money that the single risk is also becoming too big for banks to bear, which is why, in the last quarter, SoftBank quickly repaid a big bridge loan:

By September 15, 2026, the Company had prepaid the full $30.0 billion drawn under a $40.0 billion bridge facility agreement entered into in March 2026, primarily to fund follow-on investments in OpenAI. The remaining $10.0 billion undrawn facility was canceled effective September 30, 2026, bringing the bridge facility to a close.

This is how the company managed to close this big debt that was making its lenders uncomfortable:

• Borrowed USD 11.87 billion through a term loan in September 2026
• A wholly owned financing subsidiary raised $7.35 billion in August 2026 through prepaid forward contracts backed by all of its Intel shares.
• A wholly owned financing subsidiary raised $5.0 billion in September 2026 by increasing the margin loan backed by Arm shares.
• Issued $14.6 billion equivalent of foreign currency-denominated senior notes and redeemed $0.67 billion of U.S. dollar-denominated senior notes prior to maturity.
• Issued ¥1,090.0 billion of domestic straight bonds and redeemed ¥527.9 billion at maturity.
• Issued ¥678.0 billion of domestic hybrid bonds and redeemed ¥405.0 billion prior to maturity on the first voluntary call date.

Where did SoftBank find the remaining USD 10 billion to complete the full USD 40 billion payment agreed in the last round of OpenAI investment? A loan agreement using OpenAI shares held by SVF2 was entered into for the general corporate purposes of the SoftBank Group and SVF2.

In a nutshell, SoftBank managed to kick the can down the road one more quarter, but in the past month the “fair value” of its assets crashed, and that is what is still making its creditors very nervous.

As you can observe in the latest financials, SoftBank Group's cash and total short-term assets are not even enough to cover its short-term liabilities (those that expire within 1 year). The real ticking time bomb lies in its long-term liabilities, 77% of which is debt equivalent to a staggering USD ~170 billion, backed by assets like Goodwill, Intangibles, and SVF investments (90% unlisted and of which SoftBank makes up its own “mark-to-market”), and “Other Financial Assets,” all of very questionable value.

All the assets I just mentioned are very illiquid, and we have already observed that since the end of September, the value of its Intel shares alone has dropped by 50%. Now tell me, how much would the “fair value” of all other SoftBank illiquid assets, some of which are ownership of companies that do not stand a chance of going IPO before going bust, truly be? Arguably, they are at least 50% LOWER than what SoftBank's absurdly high valuations claim. If you do a quick calculation, you realize that a proper mark-to-market of SoftBank assets, even without accounting for the real market liquidity to liquidate them (if any buyers can be found), would have already wiped out all of SoftBank’s shareholders’ equity.

As I said earlier, banks are still not willing to kill their golden goose, and the hope that Masaponzi son can get out of such a deep hole as he did multiple times before is high based on his track record. However, hoping for a miracle to occur is poor risk management, and if the market continues to worsen, banks might ultimately decide to kill their golden goose to recover their money and eventually limit their losses as much as possible. Something that, considering the quality and true value of SoftBank assets, might be a very hard task to achieve. So don’t be surprised if, all of a sudden, banks start panicking and pull the rug out from under the feet of SoftBank’s shareholders.