SoftBank posts $8.9 billion loss due to Uber and WeWork, ‘My investment judgment was poor,’ SoftBank’s Son says
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SoftBank reported its first quarterly loss in 14 years on Wednesday. The company announced it lost $8.9 billion during the quarter. The quarterly report highlighted two major issues facing company: Significant decrease in profit and WeWork problem.
“My investment judgment was poor in many ways and I am reflecting deeply on that,” Softbank CEO Son, 62, told a news conference following the results. It was a remarkable admission for an executive well known for his ebullience.
Overall, the group posted an operating loss of 704 billion yen ($6.5 billion) in the July-September quarter compared to a 706 billion yen profit in the same period a year earlier and a 48 billion yen loss forecast by analysts, according to Refinitiv.
The Japanese giant wrote down the value of its investment in once high-flying shared-office startup WeWork by $3.4 billion in the second quarter and expected the loss to widen to 497.7 billion yen ($4.6 billion) in the current fiscal year.
The Softbank Vision Fund is backed by Saudi Arabia and run by ex-Deutsche Bank banker Rajeev Misra. To date, Softbank Vision Fund has invested $70.7 billion in 88 companies at the end of September. Those investments are now worth $77.6 billion excluding exits, the company said.
Below are the quick highlights from the earning report.
- Second-quarter operating loss at 704 billion yen.
- That compares with 706 billion operating profit a year earlier.
- Vision Fund recorded unrealized 537.9 billion yen loss for 6 months.
- Vision Fund has invested $70.7 billion in 88 start-ups. Those investments are now worth $77.6 billion.
- SoftBank marked down investments in WeWork and Uber.