SoftBank's Son stays bullish despite record $6.4bn loss

Nov 07, 2019 | News On Japan

Nov 07, 2019 (Nikkei) - SoftBank Group CEO Masayoshi Son said Wednesday he made a "poor" decision investing in U.S. office sharing company WeWork at a $47 billion valuation, which led to the worst financial performance in the company's history.

Son nevertheless defended the $100 billion Vision Fundâ€™s track record and said SoftBankâ€™s shareholder value was at a record high, in a bullish show of confidence in his groupâ€™s overall strategy.

"WeWork had a very big impact on the performance of Vision Fund and SoftBank," Son, 62, said in an earnings presentation in Tokyo as he strutted about on a stage backlit by charts and earnings projections. "I have a lot of reflection that my investment judgment was poor in many ways," he said.

SoftBank reported on Wednesday a larger than expected loss of 700 billion yen ($6.4 billion) for the July-September quarter due to investment write-downs at its Vision Fund portfolio of companies, which includes WeWork and Uber Technologies.

The dramatic swing from a 1.12 trillion yen profit the previous quarter -- the highest quarterly profit ever for a Japanese company -- is a major blow for Son and underlines the volatility of the Japanese conglomerateâ€™s tech-focused investment strategy.

Son described the results as â€œdisastrousâ€ and said it was the â€œbiggest quarterly loss since since the start of our business.â€

At the same time, Son said two numbers indicated that both SoftBank and the Vision Fund are doing extremely well: what he claimed to be a 1.4 trillion yen rise in shareholder value over the three-month period, and a 1.2 trillion yen overall profit for the Vision Fund, since it began investing in 2017. In the second quarter, it suffered a 970 billion yen loss.

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