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    Activist Macellum seeks to take control of Kohl's board, nominates 10 directors

    Activist group Macellum has amplified the pressure on Kohl’s as it seeks to take control of the retailer’s board by nominating 10 directors.
    Macellum, led by Jonathan Duskin, has criticized Kohl’s for not performing as well as it could in recent years.
    Earlier this month, Kohl’s rejected two takeover offers that it said undervalued its business, and it also adopted a “poison pill” plan to avoid a hostile takeover.

    Customers leave a Kohl’s store on November 12, 2015 in San Rafael, California.
    Justin Sullivan | Getty Images News | Getty Images

    Activist group Macellum has amplified the pressure on Kohl’s as it seeks to take control of the retailer’s board by nominating 10 directors.
    Macellum, led by Jonathan Duskin, has criticized Kohl’s for not performing as well as it could in recent years. Last month, it called for the company to consider selling itself.

    A representative from Kohl’s didn’t immediately respond to CNBC’s request for comment.
    This is the second time that Macellum has nominated directors at Kohl’s. Last year, it pushed Kohl’s to expand its 11-member board by three directors.
    Earlier this month, Kohl’s rejected two takeover offers that it said undervalued its business, and it also adopted a “poison pill” plan to avoid a hostile takeover. Duskin said Thursday that, “it seems to us the board is doing everything in its power to chill a normal-course sale process and quell interest from other bidders during what we view as a unique window of opportunity.”
    He also said that reports have been circulating about Kohl’s jet recently flying to Seattle, where Amazon is headquartered.
    Kohl’s has said it formed a finance committee, comprised exclusively of independent directors, to lead an ongoing review of any future expressions of interest in the company. It is also working with bankers at Goldman Sachs and PJT Partners on those efforts.

    Macellum, however, doesn’t believe Kohl’s is serious enough about those efforts.
    “We also doubt that the board has been directing its bankers to aggressively canvass the market and initiate substantive conversations with additional suitors,” said Duskin.
    On Macellum’s list of nominees are: Duskin; George Brokaw, a former investment banker; Francis Duane, a former vice president at PVH Corp..; Pamela Edwards, chief financial officer of Citi Trends; Stacy Hawkins, a vice dean at Rutgers Law School; Jeffrey Kantor, a former Macy’s executive; Perry Mandarino, co-head of investment banking at B. Riley Securities; Cynthia Murray, former president of Chico’s; Kenneth Seipel, former vice president of stores at Old Navy; and Craig Young, who has experience in real estate private equity.
    Kohl’s shares were up more than 1% in premarket trading, having risen about 25% year to date.
    Read the full letter from Macellum here.

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    PepsiCo beats on fourth-quarter earnings, but warns of cost pressure

    PepsiCo topped analysts’ expectations for quarterly earnings and revenue in the fiscal fourth-quarter, but gave a weaker-than-expected outlook for 2022.
    The food and beverage giant said it is feeling the impact of inflation, as the price of cooking oil, packaging and transportation rise.
    The company said it expects to return about $7.7 billion to shareholders in the coming year, including dividends of $6.2 billion and share buybacks totaling $1.5 billion.

    In this photo illustration PepsiCo products are shown on October 05, 2021 in Chicago, Illinois.
    Scott Olson | Getty Images

    PepsiCo on Thursday beat quarterly revenue expectations by more than $1 billion, but warned that it is costing more to make its snacks and sodas and get them to store shelves.
    Shares rose less than 1% in premarket trading, despite the company’s full-year outlook falling short of what analysts predicted.

    Pepsi is feeling the impacts of inflation across its businesses. With Frito-Lay North America, the maker of Lay’s potato chips and Cheetos, it has had to pay more for cooking oil and packaging. With PepsiCo Beverages North America, it said transportation and commodities have become pricier.
    Some of those higher costs are getting passed on to customers. The company already hiked prices on products and said in October that another price increase could come in the fiscal first quarter of 2022.
    So far, customers are still buying — despite those new price tags.
    Its rival, Coca-Cola is fighting similar headwinds.
    In an interview on Thursday with CNBC’s “Squawk Box,” Pepsi’s Chief Financial Officer Hugh Johnston acknowledged cost challenges, but said the company has the brand loyalty and pricing power to “get through the year with our margins pretty well intact.”

    “We feel really good about the momentum that we have in the business right now,” he said.
    Pepsi said it also had higher advertising and marketing expenses in the fourth quarter for some brands, including Quaker Foods North America and PepsiCo Beverages North America.
    Here’s what the company reported compared with what Wall Street was expecting for the fiscal fourth-quarter ended Dec. 25, based on a survey of analysts by Refinitiv:

    Earnings per share: $1.53 adjusted vs. $1.52 expected
    Revenue: $25.25 billion vs. $24.24 billion expected

    The food and beverage giant’s net income for the quarter came in at $1.32 billion, or 95 cents per share. That’s down from $1.85 billion, or $1.33 per share, a year earlier.
    Excluding items, Pepsi earned $1.53 per share, topping the $1.52 per share expected by analysts surveyed by Refinitiv.
    Net sales increased 12% to $25.25 billion, higher than expectations of $24.24 billion.
    The company’s organic revenue, which strips out the impact of acquisitions and divestitures, rose 11.9% in the quarter. In 2022, Pepsi said it expects organic revenue growth of 6%.
    Frito-Lay saw its organic revenue increase by 13% for the quarter. Pepsi’s North American beverage business reported organic revenue growth of 12%. Quaker Foods North America saw its organic revenue increase by 9%. And among the company’s global parents, Latin America saw the biggest quarterly jump, with 17% organic revenue growth.
    Pepsi said it expects to return about $7.7 billion to shareholders in the coming year, including dividends of $6.2 billion and share buybacks totaling $1.5 billion.
    Shares of Pepsi are up 23% over the past 12 months. The company’s stock closed Wednesday at $171.94, bringing the company’s market value to $237.73 billion.
    Read the company’s press release here.
    This story is developing. Please check back for updates.

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    White House rolls out $5 billion funding plan to states for electric vehicle chargers

    The Biden administration this week rolled out a plan to allocate $5 billion to states to fund electric vehicle chargers over five years as part of the bipartisan infrastructure package.
    The historic investment is part of the administration’s broader agenda to combat human-caused climate change and advance the clean energy transition.
    Despite a rise in EV sales in the U.S. in recent years, the transportation sector is still one of the largest contributors to U.S. greenhouse gas emissions.

    President Joe Biden speaks during a visit to the General Motors Factory ZERO electric vehicle assembly plant, Wednesday, Nov. 17, 2021, in Detroit.
    Evan Vucci | AP

    The Biden administration this week rolled out a plan to allocate $5 billion to states to fund electric vehicle chargers over five years, as part of the bipartisan infrastructure package that includes $7.5 billion to build a sprawling network of EV charging stations across the country.
    The investment is part of the administration’s broader agenda to combat human-caused climate change and advance the clean energy transition. The Biden administration has touted EVs as more affordable for Americans than gas-powered cars and has pledged that half the vehicles sold in the U.S. will be electric or plug-in hybrids by 2030.

    The new guidance will help states build a network of EV charging stations along designated alternative fuel corridors on the national highway system, senior administration officials said during a press briefing Wednesday.
    Despite a rise in EV sales in the U.S. in recent years, the transportation sector is still one of the largest contributors to U.S. greenhouse gas emissions, comprising roughly one-third of emissions each year.
    Roughly 24% of new vehicles sold worldwide are likely to be fully electric by 2030, according to forecasts from consulting firm Alix Partners. The U.S. is the world’s third-largest market for EVs behind China and Europe.
    The program to build out charging stations could save an average driver who uses an electric vehicle up to $1,000 each year on gasoline, President Joe Biden said. Tritium, an Australian company that makes EV chargers, is set to build a manufacturing facility in Tennessee that will produce up to 30,000 chargers each year and create 500 local jobs.
    Under the plan, entitled the National Electric Vehicle Infrastructure Formula Program, states must submit their EV infrastructure deployment plans to the Joint Office of Energy and Transportation by Aug. 1. The Federal Highway Administration will approve eligible plans by Sept. 30.

    Transportation Secretary Pete Buttigieg and Energy Secretary Jennifer Granholm are set to give remarks in Washington, D.C., on Thursday about the guidance.
    “It’s going to help ensure that America leads the world on electric vehicles,” the president said during a speech earlier this week to promote American companies expanding EV infrastructure in the U.S.
    “China has been leading the race up to now, but this is about to change,” Biden said. “Because America is building convenient, reliable, equitable national public charging networks. So wherever you live, charging an electric vehicle will be quick and easy.”
    Officials during the call Wednesday said they will unveil guidance on the other $2.5 billion for EV charging stations as part of the bipartisan infrastructure plan later this year. That funding will involve discretionary grants for corridor and community EV charging.
    The administration has previously proposed an EV incentive package that would allocate additional money for consumers who bought electric vehicles built by unionized workers. The administration has also committed to replace its federal fleet of 600,000 cars and trucks to electric power by 2035. 

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    Last responders: Mental health damage from Covid could last a generation, professionals say

    Many psychologists and psychiatrists have reported an influx of people seeking mental health support during the pandemic.
    Numerous studies have been carried out looking into the impact of Covid on mental health.
    One study, published in The Lancet medical journal in October, looked at the global prevalence of depression and anxiety disorders in 204 countries and territories in 2020 due to the Covid pandemic.

    Medic with face mask.
    Haris Mulaosmanovic / EyeEm | EyeEm | Getty Images

    Aside from the obvious physical impacts of the Covid-19 pandemic, health professionals have told CNBC that many people are struggling with the immense emotional and societal changes it has brought. What’s more, they’re finding it hard to adapt to a “new normal” now that lockdowns are starting to ease. 
    Many psychologists and psychiatrists have reported an influx of people seeking mental health support during the pandemic, with the unprecedented global health crisis causing an increase in anxiety and depression as well as exacerbating existing mental health conditions.

    “I have never been as busy in my life and I’ve never seen my colleagues as busy,” Valentine Raiteri, a psychiatrist working in New York, told CNBC.
    “I can’t refer people to other people because everybody is full. Nobody’s taking new patients … So I’ve never been as busy in my life, during the pandemic, and ever in my career,” he said, adding that he’s also seen an influx of former patients returning to him for help.
    Raiteri said that many of his patients are still working remotely and were isolated, with many feeling “disconnected and lost, and they just have this kind of malaise.”
    “That is really hard for me to do anything about,” he said, noting: “I can’t make the pressures disappear. I can always treat the illness that it provokes.”

    A daughter visiting her quarantined mother during a Covid lockdown.
    grandriver

    Numerous studies on the impact of Covid on mental health have been carried out. One study, published in The Lancet medical journal in October, looked at the global prevalence of depression and anxiety disorders in 204 countries and territories in 2020 due to the Covid pandemic.

    It found that mental health dramatically declined in that year, with an estimated 53 million additional cases of major depressive disorders and 76 million additional cases of anxiety disorders seen globally. Women and younger people were found to be affected more than men and older adults.

    Anxieties

    As the pandemic really took hold in the spring of 2020, there was little understanding of how long the pandemic would last. Psychologists say there was a surprising amount of resilience during the first few months of the virus’ outbreak, particularly when many countries went into unprecedented lockdowns.
    Raiteri said that over time, however, the loss of daily social contact started to take its toll.
    “There’s definitely a huge mental health impact from a long period of uncertainty and change that’s left people very isolated and not sure how to connect. Just being out in public and interacting in a very casual way with strangers or mild acquaintances, that’s very regulating, and norm-creating and reality affirming.”
    When we stop getting those signals, Raiteri said, “our internal voices become stronger and it becomes harder and harder to self regulate.”
    That created a “big pressure cooker, especially for people who already have a vulnerability,” he said.
    Natalie Bodart, a London-based clinical psychologist and head of The Bodart Practice, told CNBC that the pandemic meant that many people had to confront issues in their life that they’d been able to avoid before, such as alcoholism, relationship issues, isolation and loneliness.
    “Our day to day lives serve as great defense mechanisms, we have lots of distractions that help us to avoid things, for good and for ill,” she said.
    “For example, we have had younger people that have come to us and said, ‘now that I’m not doing my very sociable busy job anymore, I realize I’ve got a problem with alcohol.’ And why is that? Well, that’s because it can’t be covered up anymore by the fact that their work demands that they socialize and drink a lot. Or, people who have been in relationships where they don’t see that much of their partner, so it works, it functions, but then you’re stuck at home with that person and suddenly realize, actually, there’s a lot of things coming out that we just haven’t confronted or haven’t realized.”

    For some people, particularly those with acute social anxiety, Covid lockdowns provided the perfect cover, however.
    “For many people, they work really hard, pushing themselves to interact more with other people to socialize more, and Covid just meant that they didn’t have to do that anymore. So they were talking about this huge sense of relief,” Leigh Jones, a clinical psychologist and the co-founder of Octopus Psychology, told CNBC.
    “But although they were kind of delighted when it first happened, then [they were] being really worried about facing people again. And that’s been a kind of across the board, people with social anxiety, people with personality disorder, who are avoidant of other people, because … it wasn’t so much the isolation that was difficult. It was the getting back out there,” said Jones, who works with both public and private patients in Leeds and Bradford in northern England.
    “For practically everybody I see, Covid has had some kind of impact,” she said, noting she has other patients “who have huge issues around feeling very, very vulnerable to harm or illness” or contagion.
    “Obviously, for them, this has been their worst nightmare,” she said.

    Trauma

    To date, there have been over 400 million Covid cases around the world and over 5.7 million deaths, according to data compiled by Johns Hopkins University. Restrictions on social contact have prevented millions of people from sharing not just milestones like births and weddings with family and friends, but also final moments with loved ones, with many unable to hold or attend funerals during the strictest points of lockdown.
    Jones noted that she had concerns over the loss of “rituals” associated with death. “I do really worry about the impact on grieving, because we have rituals for a reason, which is to help us process the loss and the grief,” she said.

    Cemetery workers in protective gear bury people who died of causes related to Covid-19 at Novo-Yuzhnoye Cemetery in Omsk, Russia.
    Yevgeny Sofiychuk | TASS | Getty Images

    Katherine Preedy, a clinical psychologist based near London, told CNBC that she is seeing “a lot of trauma, either people who’ve lost people due to Covid” or have experienced other traumatic situations such as not being able to visit sick or dying relatives because of restrictions.
    “This is a whole generation [that’s been affected by Covid], it’s two years of our lives, I think this will have a big impact. There may be first responders, people in hospitals, who are still very much in that survival mode, and then, there’s obviously the emotional impact on people, whole industries being lost, the health [impact].”
    She noted that mental health professionals are also under pressure to help a greatly increased number of patients.

    CNBC Health & Science

    “We’re a nation that’s traumatized and under stress; the whole world is under trauma and stress, which means we, like the people we work with, have fewer resources to draw on and have to work a bit harder to make sure we’re looking after ourselves,” she continued.

    Milestones lost

    Bereavement, isolation, uncertainty and loss — a loss of freedoms, relationships and moments that can’t be relived and retrieved — are just some of the issues that have affected many people during the pandemic. Psychologists say that while the pandemic may be in its “endgame” phase now, the mental health impact of Covid could be felt for years.
    Alex Desatnik, a consultant clinical psychologist in the U.K. working with adults and children, told CNBC that he believes it will take “at least a generation” to resolve the damage to many young people caused by missed milestones and experiences crucial for development.

    “Kids who grew up in this state, in this condition, and those things that they were deprived of, they will take this with them through life. I hope that as a society we will do as much as we can to compensate for what happened, and is still happening, actually,” he said.
    “You are a 15-year-old teenager only once,” he said. “Everything we know about brain development, physical development, emotional development, with each age there is a unique window of opportunities” in which to grow, learn and develop, he said.
    Milestones linked to age and development are, once passed, tricky to go back and “repair” Desatnik noted.

    The new normal?

    The advent of Covid vaccines has heralded what we all hope is the beginning of the end of the pandemic, despite new variants like omicron posing challenges to the shots that have been developed. The threat of a new mutation that could pose a more severe risk to health is also a concern.
    For now, however, most developed nations with widespread vaccination coverage, and booster programs, are reopening and getting back to normal, or a “new normal” — perhaps one in which routine mask-wearing and Covid testing are a part of our lives for the foreseeable future.

    Shoppers wearing face masks as a preventive measure against the spread of Covid-19 seen walking along Oxford Circus in London.
    SOPA Images | LightRocket | Getty Images

    Bodart noted that “one thing we’re maybe confronting now at this stage in the pandemic, in my opinion, is this sense that we’re not really going back, we’re not going back to how things were.”
    “We’ve kind of got into this very hybrid living situation now, where companies and most places … seem to be accepting that this hybrid situation is going to be continuing. So there’s a bit of a strange feeling about that — how does that feel? To know that life has, sort of, changed now? And maybe for many people of a particular generation, this is the first major life transition of that kind that’s come about,” she noted.
    The pandemic had offered an opportunity for people to look within and to confront personal issues and problems, and has forced many to do so. There can even be positive outcomes to that, Bodart said.
    “I think for some people, they have gone back to things that they needed … things have opened up a bit and so that’s been very helpful,” she said.
    “But maybe for other people, if they’ve been put in touch with something, they’ve become aware of something, then you can’t really bury that again. That’s going to be something that you then have to work through and address, and maybe that’s a good thing.”

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    More countries reopen to travelers, signaling a big shift in pandemic thinking

    CNBC Travel

    Another day — another border reopens.      
    In the past two weeks, a slew of countries announced plans to reopen or relax border restrictions. These include places that have maintained some of the strictest pandemic-related border controls in the world. 

    The announcements come on the heels of a record-setting period of global infections. According to the World Health Organization, Covid-19 cases hit a new peak worldwide in late January, with more than 4 million cases registered in a single day. 
    However, many countries are signaling that they can’t economically afford — or are no longer willing — to stay closed.
    The pervasiveness of the omicron variant, which started spreading in countries — both open and closed — late last year, led people to question the utility of locked border policies.
    In addition, more than half (54%) of the world’s population is now vaccinated, according to Our World in Data. Medical treatments can successfully thwart and treat severe infections. And, many experts are now “cautiously optimistic” — as top American medical advisor Dr. Anthony Fauci has stated — that a new phase of the pandemic may be within reach.

    Australia

    Arguably the biggest announcement of the past week came Monday, when Australia declared plans to reopen to vaccinated travelers from Feb. 21.

    The news signaled the end to “Fortress Australia,” a moniker applied to the country’s controversial closed border policy that locked out foreigners and citizens alike.

    Visitors to Australia must be vaccinated, a requirement underscored by the country’s much discussed ouster of tennis player Novak Djokovic in January.
    James D. Morgan | Getty Images Sport | Getty Images

    The economic toll of Australia’s insular border policy was highlighted in January, when soon after backpackers were granted permission to enter, Prime Minister Scott Morrison pledged to refund some $350 in visa fees to those who moved swiftly. As it turned out, the about-face toward “working holiday maker” visa holders was part of an effort to reduce severe labor shortages.
    Darryl Newby, co-founder of the Melbourne-based travel company Welcome to Travel, said the pandemic “not only affected the travel sector but every single industry” in Australia.
    Pressure mounted when Covid infections skyrocketed in December, leaving an open question as to the purpose of keeping vaccinated and tested travelers locked out.

    “Negative sentiment,” which began showing up in market research, may have been another factor, according to The Sydney Morning Herald. The article quoted Tourism Australia Managing Director Phillipa Harrison as saying the country went from being “envied” to “ridiculed” over its border policies, with some fearing lasting damage to Australia’s touristic appeal.
    The state of Western Australia, home to Perth, is not reopening to either foreigners or Australian tourists yet. It scrapped plans to reopen amid a rise in Covid cases in January.
    Percent of peak*: 38%
     *Reuters’ rolling 7-day daily case average compared with the country’s all-time highest infection rate.

    New Zealand

    Another so-called “fortress” announced plans to welcome back vaccinated international visitors.
    Unlike Australia, New Zealand last week outlined a five-step phased reopening plan that won’t allow international travelers to enter until July, at the earliest. Vaccinated travelers must also self-isolate for 10 days upon arrival.
    With some exceptions, the plan first welcomes citizens and residents to enter later this month, if they are traveling from Australia. Citizens and residents coming from other places, plus eligible workers, can enter in mid-March, followed by some visa holders and students in mid-April.
    Vaccinated travelers from Australia and those from countries who don’t need visas — including those from Canada, the United States, Mexico, the United Kingdom, France, Germany, Israel, Chile, Singapore and the United Arab Emirates — can enter from July. Others will be allowed to visit starting in October.
    Percent of peak: At peak and rising

    Philippines

    After closing its borders in March 2020, the Philippines announced plans to reopen today to vaccinated travelers from more than 150 countries and territories.  
    The country suspended its color-coded country classification program in favor of opening to vaccinated travelers who test negative via a PCR test. Facility-based quarantines were also replaced with a requirement to self-monitor for seven days.

    Travelers to the Philippines must have valid return tickets and travel insurance with medical coverage of at least $35,000.
    Rouelle Umali | Xinhua News Agency | Xinhua News Agency | Getty Images

    Covid cases in the Philippines peaked last month, with more than 300,000 daily cases at one point. Cases dropped as quickly as they rose, with 3,543 confirmed cases in the past 24 hours as at Feb. 10, according to the WHO.
    Despite the surge, the Philippines’ Department of Tourism indicated the decision to reopen was related to economic hardship and, possibly, to match the policies of other Southeast Asian countries.
    “The Department sees this as a welcome development that will contribute significantly to job restoration … and in the reopening of businesses that have earlier shut down during the pandemic,” said Tourism Secretary Berna Romulo-Puyat in an article on the department’s website. “We are confident that we will be able to keep pace with our ASEAN neighbors who have already made similar strides to reopen to foreign tourists.”
    Percent of peak: 19% and falling

    Bali 

    Despite rising infections, Bali, Indonesia, opened to vaccinated international travelers last week.
    “It is known that currently the positivity rate is already above the WHO standard of 5% … the number of people who are checked and tested on a daily basis has also increased significantly,” according to a news release published on Jan. 31 on the country’s Coordinating Ministry for Maritime and Investment Affairs office.

    A woman meditates sitting in a bale in Bali, Indonesia.
    Ted Levine | The Image Bank | Getty Images

    Malaysia

    Malaysia’s National Recovery Council on Tuesday recommended that the country reopen to international travelers as early as March 1, according to Reuters.
    Travelers are not expected to have to quarantine on arrival, similar to tourism policies enacted by Thailand and Singapore.
    Nearly 98% of Malaysia’s adult population is vaccinated, according to the country’s Ministry of Health, with more than two-thirds using vaccines produced by Pfizer or AstraZeneca, and one-third on the Chinese-made Sinovac vaccine.
    Malaysia may be on its way toward an omicron-induced case peak. A steep uptick in daily cases began two weeks ago and has yet to decline.
    Percent of peak: 41% and rising

    Relaxing travel restrictions

    Countries that are already open to international travelers are moving to further relax entrance requirements.
    Though Europe is the regional leader in new Covid cases according to the WHO, countries such as Greece, France, Portugal, Sweden and Norway have announced plans to drop incoming test requirements for vaccinated travelers — though some apply only to EU residents.
    Last week, the islands of Puerto Rico and Aruba enacted similar measures.
    Other places are moving in the opposite direction. After shuttering bars and banning some incoming flights in late January, Hong Kong this week imposed new restrictions, including limiting public gatherings to two people. The restrictions are causing citywide food shortages, inflated prices and a rising public anger, according to The Guardian.  
    China also reinstituted strict measures ahead of the Winter Olympic Games, with lockdowns affecting some 20 million people in January, according to the Associated Press.   
    Though both relaxed border restrictions, the Philippines and Bali also announced heightened local restrictions this year. More

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    SoftBank's long-term investment strategy may benefit in the current interest rate environment, says CLSA

    The current interest rate environment could favor Japanese conglomerate SoftBank Group’s strategy of long-term investing, according to CLSA’s Oliver Matthew.
    The planned IPO of Arm is also a catalyst for shares of SoftBank Group, said Matthew.
    Shares of SoftBank Group in Japan soared on Wednesday after the company announced it will seek a potential listing for its Arm unit. The conglomerate had originally planned to sell Arm to Nvidia, but the sale collapsed amid regulatory scrutiny.

    The current interest rate environment could favor Japanese conglomerate SoftBank Group’s strategy of long-term investing as it looks to buy earlier stage tech companies at lower valuations, according to CLSA’s Oliver Matthew.
    With prices of potential acquisitions now coming down as investors brace for higher rates, Matthew told CNBC’s “Squawk Box Asia” on Wednesday that SoftBank may end up “getting a better deal.”

    Still, he acknowledged that the drop in valuations for listed growth companies this year has also been a clear headwind for the Japanese conglomerate’s stock. Valuations of growth firms in sectors such as tech tend to suffer in a higher interest rate environment as it makes their future earnings look less attractive.
    SoftBank’s Vision Fund is a powerhouse in venture capital, investing in everything from Uber to Chinese tech titan Alibaba. Caught in the crossfire of Beijing’s ongoing regulatory crackdown on its domestic tech sector, SoftBank has had to trim its stakes in companies like Uber to cover those losses.

    Arm IPO: A catalyst for SoftBank shares?

    The planned IPO of Arm is also a catalyst for shares of SoftBank Group, said Matthew, who is head of Asia consumer at CLSA.
    Shares of SoftBank Group in Japan soared nearly 6% on Wednesday after the company announced it will seek a potential listing for its Arm unit. Some of those gains were later trimmed, with the stock falling about 3% in Thursday morning trade.

    Stock picks and investing trends from CNBC Pro:

    The Japanese conglomerate had originally planned to sell Arm to Nvidia, but the sale collapsed amid regulatory scrutiny.

    The deal was announced back in 2020 and valued at $40 billion in Nvidia stock and cash. With the sale now off the table, Arm is set to prepare for a public debut within the fiscal year ending March 31, 2023.
    “When they did the deal with Nvidia, it was a little bit complicated because they were taking two-thirds of the price in Nvidia stock — which we know SoftBank was very, very bullish on,” said Matthew. As a result, the Japanese conglomerate is likely to look for a higher valuation and let Arm go public “at a pretty decent price.”
    SoftBank bought Arm in 2016 for $32 billion.

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