SoftBank posts $8.9 billion loss due to Uber and WeWork, ‘My investment judgment was poor,’ SoftBank’s Son says

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.