How to Judge the Value of Softbank (int'l edition)

Although you had hoped that Softbank Corp.'s stock would be traded in the range of $700, its stock price has been sinking to a current low level of $600 (''Is Softbank sinking? Don't bet on it,'' Asian Business, Apr. 24).

Your sympathetic attitude toward Softbank does not bother me--what does concern me is that the article was the defense against various attacks from Softbank critics. You failed to state the fundamental value of a stock-holding company like Softbank.

Since the cash flow of Softbank is negligible compared with its market capitalization ($70 billion), you can't discuss the true value of it unless you evaluate its holdings in Internet stocks. In other words, any analysis of Softbank's worth cannot neglect evaluating the value of Yahoo!, Yahoo! Japan, and the other small holdings that are Softbank's assets.

In fact, the total market value of the stocks held by Softbank has shrunk to $29 billion from its peak of $50 billion. To be even more realistic, you must consider the tax, which further suppresses profits to $15 billion.

The only plausible explanation for the gap between $70 billion and $15 billion is the expected value of Softbank's $1.5 billion investment in Internet startups.

Yet even the most optimistic evaluation of such an investment won't persuade sensible investors at this time.

Yoshinari Hirata
Tokyo

It's Far Too Late to Stop Globalization (int'l edition)

The AFL-CIO and some students who have signed on to the rally against world trade may have misunderstood the issue. True, barriers have come down, and companies today do business across the world. But wages have gone up here as in other parts of the world. The missing link--here as anywhere else--is the person who has no skills and no work background in a qualifying job and so does piece work. This is where the job losses are, simply because piece work, if it can be done cheaper somewhere else, will be. Skilled workers should have no fear of job loss from labor competition.

Wages go up with trade. Trade creates demand or satisfies demand. The lesson is that competition for labor increases wages and improves worker conditions over time.

Bob Averill
Montpelier, Vt.