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SoftBank's startup bookkeeping draws scrutiny after WeWork fiasco

The Japan Times

In early 2018, the founders of Chinese artificial intelligence startup SenseTime Group Ltd. flew to Tokyo to see billionaire investor Masayoshi Son. As they entered the offices, Chief Executive Officer Xu Li was hoping to persuade the head of SoftBank Group Corp. to invest $200 million in his three-year-old startup. A third of the way into the presentation, Son interrupted to say he wanted to put in $1 billion. A few minutes later, Son suggested $2 billion. Turning to the roomful of SoftBank managers, Son said this was the kind of AI company he'd been looking for. "Why are you only telling me about them now?" he asked, according to one person in the room.


SoftBank foresees $12.5 billion loss as startup bets backfire

The Japan Times

SoftBank Group Corp. forecast a record ¥1.35 trillion operating loss for the fiscal year ended in March, a sign of how badly Masayoshi Son's bets on technology startups have been battered in recent months. The company expects to record a ¥1.8 trillion ($16.7 billion) loss from its Vision Fund and another ¥800 billion in losses from SoftBank's own investments. It has written down the value of investments in companies, including office rental startup WeWork and satellite operator OneWeb, which filed for bankruptcy last month. Son's conglomerate has taken one blow after another since the implosion of WeWork's initial public offering last year and SoftBank's subsequent bailout. It bet heavily on sharing-economy startups, which allow people to split the use of offices or cars, but those investments have been particularly hard hit as the coronavirus pandemic curbs unnecessary human interaction.


After 133% rally, SoftBank investors bet there's more to come

The Japan Times

SoftBank Group Corp. founder Masayoshi Son has delivered a clear response to critics who thought the twin disasters of WeWork and the coronavirus would bring down his empire: not just yet. The technology giant's shares have more than doubled from their March low, propelled by buybacks and improving market conditions for its portfolio companies. They gained another 3.6 percent on Monday. SoftBank bonds, which traded at less than 65 cents on the dollar in March, have recovered to near par. Son, 62, has seen his own net worth soar to $20 billion, the highest since the Bloomberg Billionaires Index began tracking his wealth.


WeWork said to be eyeing bailout that will hand control to SoftBank

The Japan Times

NEW YORK – WeWork is considering a bailout that will hand control of the co-working giant to SoftBank Group Corp., according to a person familiar with the matter, one of two main options to rescue the once high-flying startup. The Japanese investment powerhouse controlled by billionaire Masayoshi Son is convinced it can turn around the cash-strapped American company with the right financial controls in place, the person said, asking not to be identified talking about internal deliberations. WeWork's board and backers, however, are also weighing another option: JPMorgan Chase & Co. is leading discussions about a $5 billion debt package, Bloomberg has reported. Either rescue package would ease a cash crunch that could leave the office-sharing company short of funds as soon as next month. The office-sharing startup had been headed toward one of the year's most hotly anticipated IPOs before prospective investors balked at certain financial metrics and flawed governance, turning the American giant into a cautionary tale of private market exuberance and costing the company's top executive his job.


SoftBank Group Reports Record Losses As Ma Quits Board

International Business Times

Struggling Japanese conglomerate SoftBank Group on Monday reported record losses, as the coronavirus pandemic compounded woes caused by its investment in troubled office-sharing start-up WeWork. The losses were announced shortly after the firm said Chinese tycoon and Alibaba co-founder Jack Ma would resign as a director of the board next month. The telecoms and investment giant had already sounded the alarm, warning last month that the "deteriorating market environment" would hit its bottom line. But the results were slightly worse than it had forecast, with net losses for the year that ended in March coming in at 961.6 billion yen ($8.9 billion), rather than the estimated $8.4 billion. Operating losses for the year were 1.36 trillion yen, having forecast 1.35 trillion last month.