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 Fund’s track record and said SoftBank’s shareholder value was at a record high, in a bullish show of confidence in his group’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 conglomerate’s tech-focused investment strategy.
Son described the results as “disastrous†and said it was the “biggest 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.
