Effective stock trading and investing decisions depend on understanding takeovers and partnerships. Some of these takeovers could revolutionize or disrupt the industry. They could transform a dull industry into a beehive of activity. And such a groundbreaking partnership has happened in the exciting autonomous vehicle (AV) industry.
SoftBank Invests Substantially in General Motors’ Cruise
Self-driving car technology gets a new push with SoftBank Group Corp of Japan investing $2.25 billion General Motors’ ($GM) Cruise self-driving car unit. The announcement was made by both the companies on Thursday, May 31. This deal cements the leadership of $GM as the leader in self-driving cars. The news sent $GM shares up by over 10%.
The investment is made by the $100-billion Vision Fund of SoftBank, and this $2.25 billion investment will be among the largest investments made in autonomous driving technology. This is quite a coup for GM since SoftBank is one of the world’s high profile global investors in technology.
GM Now Has the Funds for Its Autonomous Vehicle Plans
GM now gets much needed funds to roll out autonomous cars en masse next year, as GM has always planned. Cruise is valued by the partnership at $11.5 billion. Remember, Cruise itself was acquired by GM and it was considered absurd to be paying $1 billion for acquiring the startup in 2016. But with Cruise being valued so highly by SoftBank, GM’s decision has been vindicated. The stock jump that GM experienced as a result of the news was its largest single day jump since its re-listing following its bankruptcy in 2009.
Ride-sharing Fleets Are the Prime Target
According to GM CEO Mary Barra, the company is well on target to get its Cruise autonomous vehicles into various ride-sharing fleets by 2019. But GM is also planning to get its own delivery and ride services business up and running. It has said it’s open to exploring potential opportunities with the other companies funded by SoftBank, such as Didi, Uber, Grab and Ola.
When GM purchased Cruise, it kick-started a flurry of dealsall through Silicon Valley. This SoftBank partnership announcement could accelerate that frenzy again, according to Reuters analysts. Even after the takeover, Cruise was allowed to operate with a great deal of autonomy though CEO of Cruise Kyle Vogt did claim that it took some time to settle into each other, according to Reuters.
SoftBank Has Other Transportation Investments Too
This isn’t the only transportation-based startup that SoftBank has invested significantly in. There are others too, including self-driving tech startups. Its Vision Fund became the largest shareholder of Uber Technologies in January this year. Another SoftBank fund invested $4.58 billion in Didi Chuxing, the Chinese ride-hailing service.
It’s worth watching this space to check out what new products this SoftBank-GM Cruise partnership brings forth. Actual stock trading can be even more exciting when you have the right tools in terms of trading platforms to help you have a clear picture of the markets and stocks. TradeZero offers advanced trading software as well as zero commission trading to make the stock market a great place for you. Contact us at +1 954-944-3885 or email email@example.com.
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