SoftBank’s Masa Son: I ignored WeWork’s problems, made bad investments in US tech firms, and I’m really sorry.

Son said he personally “shut his eyes” to former WeWork CEO Adam Neumann’s negative aspects

Nov.November 06, 2019 03:00 PM
SoftBank CEO Masayoshi Son (Credit: Getty Images)

SoftBank CEO Masayoshi Son (Credit: Getty Images)

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

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