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SoftBank received the first quarterly loss in 14 years

Summary

SoftBank Reports First Quarterly Operating Loss in 14 Years Description video: Nov.06 — Masayoshi Son is finally disclosing the damage from SoftBank’s bets on WeWork and Uber. Bloomberg’s Annmarie Hordern reports on “Bloomberg Markets: European Open.” SoftBank received the first […]

SoftBank Reports First Quarterly Operating Loss in 14 Years

Description video:
Nov.06 — Masayoshi Son is finally disclosing the damage from SoftBank’s bets on WeWork and Uber. Bloomberg’s Annmarie Hordern reports on “Bloomberg Markets: European Open.”

SoftBank received the first quarterly loss in 14 years

SoftBank reports its first quarterly loss in 14 years at $ 6.5 billion.

The scale of the loss is due to a problem with two major projects of the investment company, one of which is WeWork. The startup’s valuation fell from $ 47 billion to $ 8 billion in a few weeks, amid a disrupted IPO. As a result, the project, which was on the verge of bankruptcy, was abandoned by its head and founder Adam Neumann..

WeWork has been a top priority for SoftBank. After the failure of the IPO and personnel changes, the investment company had to invest another $ 3 billion to buy out a controlling stake in the startup..   

SoftBank received the first quarterly loss in 14 years

Another SoftBank project also suffered losses – Uber, whose quarterly losses were 20%.

The current results are likely to affect the future strategy of SoftBank. The company has more than $ 51 billion in outstanding bonds and another $ 36 billion in bank loans.. The weighted average cost of debt of an investment company is 3.7%, which is the seventh highest of any company in the Nikkei 225 stock market. And Moody’S, and S&P rate this debt as junk.

The Saudi Arabian-backed Vision Fund, run by ex-Deutsche Bank banker Rajiv Misra, has invested $ 70.7 billion in 88 companies at the end of September. 

SoftBank owner Masayoshi Son said he expects the aforementioned fund to grow in line with the previously predicted scale..

Most of the fund’s listed investments, including Uber, Slack Technologies and Guardant Health, fell in the quarter.

SoftBank’s investment activities are supported by other projects in the Son empire, including Japanese telecom operator SoftBank Corp, which reported 9% growth in Q2 operating profit on Tuesday..

SoftBank did not release its outlook for the current business year, saying there are too many uncertainties.