(Nov 6): Masayoshi Son is finally disclosing the damage from SoftBank Group Corp’s bets on WeWork and Uber Technologies Inc.
The Japanese investment powerhouse on Wednesday reported its first quarterly operating loss in 14 years -- about US$6.5 billion ($8.8 billion) -- after writing down the value of a string of marquee investments. It swallowed a charge of 497.7 billion yen ($6.2 billion) for WeWork, whose spectacular implosion turned the once high-flying shared-office startup into a Silicon Valley punchline.
The losses call into question the billionaire founder Son’s deal-making approach just as he’s trying to raise an even larger successor to his US$100 billion Vision Fund. The investment vehicle had been a driver of profit growth at SoftBank, contributing over US$14 billion in mostly paper gains over the past two years. Now, the shrinking valuation of Uber and WeWork, once among the brightest stars in the SoftBank constellation, raises the prospects of more writedowns in the Vision Fund’s portfolio with its high exposure to businesses that prioritise growth over profitability.
