Daily Management Review

SoftBank losses from investments in Uber and WeWork may exceed $ 5 bln


10/08/2019


A sharp drop in Uber shares and the abolition of WeWork’s IPO could cost the investment structure of the Japanese SoftBank, the Vision Fund, more than $ 5 billion.



The decline in Uber shares and the decision of the world's largest coworking network WeWork to cancel the listing had an impact on SoftBank, which invested in both companies. In particular, Mitsubishi UFJ and Morgan Stanley reduced $ 5.4 billion in profit estimates for the Vision Fund, SoftBank’s main investment structure, Bloomberg writes. Operating losses for the last quarter amounted to $ 3.44 billion. As a result, SoftBank's profit for the fiscal year decreased by the same amount, to 1.01 trillion yen ($ 9.4 billion).

Head of SoftBank Masayoshi Son (No. 43 in the global ranking of billionaires; a fortune of $ 21.6 billion) has been having a difficult time since his company turned into an investment conglomerate with shares in dozens of startups around the world, the agency said. Previously, Son managed to increase his fortune by betting on large companies such as CHinese Alibaba. However, recent problems with WeWork and Uber have affected SoftBank shares, which have fallen by about 30% since the peak at the beginning of the year.

In an interview with Nikkei Business, Son admitted that he was not satisfied with such results. “I am confused and alarmed. At the pace of company growth in the United States and China, there is a strong impression that this is not enough,” said the billionaire. He also did not rule out that WeWork and Uber, may increase profits in 10 years. 

Earlier, the Nikkei Asian Review, basing on a study by Sanford C. Bernstein senior analyst at Chris Lane, wrote that the largest shareholder in WeWork’s coworking network, Japan’s SoftBank, needs the company valued at least $ 24 billion. Only then will it return the amount spent on investments.

source: forbes.com






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