SoftBank Group profit plunges owing to WeWork turmoil

Daniel Fowler
November 8, 2019

Japanese investment group Softbank reported on Wednesday that it had lost almost $6.5 billion on Uber, WeWork, and other companies in its portfolio for the quarter ending September 30.

The boss of Softbank has admitted poor judgement in relation to its investment in WeWork after reporting its first quarterly loss in 14 years.

SoftBank rescued the struggling startup last month with a roughly $10 billion injection of cash, taking majority control of the company.

On Monday, the Financial Times reported that the Japanese magnate had told his colleagues he had "created a monster" in WeWork, whose cofounder Adam Neumann stepped down as CEO in September before the company shelved its initial public offering indefinitely.

Son's net worth has plunged by about $6bn since July, when it peaked at about $20bn, according to the Bloomberg Billionaires Index, which tracks billionaires' wealth.

Last month, SoftBank confirmed that it was injecting billions of dollars into WeWork, once hailed as a shining unicorn valued at $47 billion at the start of the year. "I regret it in many ways", Mr. Son said at a news conference in Tokyo after SoftBank released its earnings.

The company is now said to be pulling out of at least half a dozen locations in Hong Kong, one of the world's most expensive property markets where ongoing protests have disrupted daily business activity, the Bloomberg news agency reported.

Vision Fund has invested $70.7 billion in 88 start-ups.

Davis Cup: PTF undecided whether to appeal ITF decision to shift venue
Bhupathi also alleged that the AITA likes to "Divide & Rule" and that is how they have been operating since the past 20 years. Initially slated for September, India's tie against Pakistan was postponed to November due to security concerns.

Oyo, India's No. 1 hotel chain, is sitting pretty after Vision Fund gave the company's founder money to buy back shares from early investors... and inflate its valuation.

SoftBank swallowed a charge of ¥497.7 billion for WeWork, whose spectacular implosion turned the once high-flying shared-office startup into a Silicon Valley punchline.

SoftBank has slashed the market value of WeWork to below $8 billion, a far cry from the $47 billion valuation it was given just months ago.

But a string of recent failures has raised questions about his judgment. After WeWork's failed IPO attempt, SoftBank was forced to bail out the start-up for more than $10bn in October.

In August, WeWork had leased four floors or about 60,000 square feet (5,574 square metres) in the Hopewell Centre building.

To cut costs, Son said WeWork would stop construction of new buildings and sell businesses unrelated to the main office-sharing model.

"The perception is that SoftBank is being dragged down into the quagmire of WeWork", he said. But Son said Internet technology is incorporated into WeWork's concept. "We are fully committed to improving the business and ensuring our long-term viability to the benefit of our landlords, members, and employees".

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER