SINGAPORE (Nov 11): Masayoshi Son wants investors to believe that a record loss from investments in money-losing start-ups WeWork and Uber Technologies is but a bump in the road. Some are not buying it.
SoftBank Group Corp’s shares fell as much as 4.2% in Tokyo trading on Nov 7, the biggest intraday decline in about six weeks. The Japanese conglomerate recorded an operating loss of ¥704.4 billion ($8.8 billion) after write-downs in WeWork and other investments, its first such loss in 14 years and the biggest quarterly shortfall ever. The US$100 billion ($136 billion) Vision Fund, the unprecedented investment fund that had been producing big profits, lost ¥970.3 billion.
At a briefing in Tokyo on Nov 6, the billionaire admitted that “earnings are a mess”. He allowed that overvaluing WeWork was a judgement error, but then spent the bulk of the nearly two-hour event defending his approach, highlighting the potential of his technology investments and boasting about his returns compared with traditional venture capitalists. He made it clear that he has no plans to back off a strategy that has rattled Silicon Valley and raised concerns of a bubble in start-up valuations. Indeed, he said that fundraising for a second Vision Fund is on track and the fund will debut soon.
