Softbank Gets Off Cheaply

from the They-know-how-to-pick-'em dept

In today's WSJ, Softbank bought 20% of Chicago-based Morningstar, the biggest mutual fund tracking company, for $91M. Morningstar has languished for years now, failing to move their paper- and subscription-based services to the web and failing to get many distribution deals. Now their competitors give a ton of data away, so who exactly is Morningstar and why should I pay for the data? Well, Softbank will likely integrate Morningstar into E*trade. Given the size of the mutual fund investor community (large but shrinking recently), there is huge upside for a trading company to court the "fundies". Free data from Morningstar might just make this buy-and-hold, passive-index-fund investor switch to E*Trade. $91M gooses both companies, so I'd say it was a bargain for Softbank.