SoftBank Group CEO Masayoshi Son admits he made massive mistakes in his handling of the Japanese company’s multi-billion dollar investments into U.S. tech companies, WeWork in particular.
“My own investment judgement was really bad,” he said at a Tokyo news conference, according to the Wall Street Journal. “I regret it in many ways.”
After writing down the value of its holdings in WeWork and 20 other investments, SoftBank’s $100 billion tech-focused Vision Fund posted a $9 billion operating loss in the third quarter of this year, its first quarterly loss since its 2016 founding. SoftBank Group’s net-wide $6.4 billion third quarter loss was the biggest in its 38-year history.
Poor performance by WeWork and Uber, another one of SoftBank’s largest investments, drove that loss. SoftBank wrote down the value of its WeWork stake by $4.7 billion and the Vision Fund’s stake down by $3.5 billion.
SoftBank has poured $20 billion in debt and equity into WeWork, including a $9.8 billion bailout part of a takeover agreed to in late October that brings its stake to 80 percent. Son promised the bailout would be the last for a company in SoftBank’s portfolio.
SoftBank claimed WeWork’s value to be as high as $47 billion until the latter’s disastrous push for an IPO revealed a troubling financial situation and suspect leadership. SoftBank now values the company at around $7.8 billion.
Son admitted he turned a blind eye to troubling behavior of now-former WeWork CEO Adam Neumann. “I shut my eyes to a lot of his negative aspects,” he said.
Still, he defended the Vision Fund’s overall performance and said he is planning another $100 billion fund, claiming that investors in the first fund are keen to participate again. [WSJ] – Dennis Lynch