SoftBank reports US$8.9 billion loss from Vision Fund

SoftBank reports US$8.9 billion loss from Vision Fund

The Japanese investment powerhouse on Wednesday reported its first quarterly operating loss in 14 years - about $6.5 billion -after writing down the value of a string of marquee investments.

SoftBank on Wednesday is expected to report a costly writedown on its $100 billion tech fund for the most recent quarter, driven mostly by Uber's poor stock performance.

SoftBank's first quarterly loss in 14 years comes after a terrible quarter for the tech companies backed by Son's venture capital funds, the $100bn (£77bn) Vision Fund and the smaller Delta Fund. The Vision Fund lost almost $9 billion in the quarter.

Speaking of WeWork co-founder Adam Neumann, who was ousted as CEO in September, Mr. Son said, "I shut my eyes to a lot of his negative aspects".

Those investments are now worth $77.6 billion.

Late last month, WeWork secured a $9.5 billion rescue package from SoftBank, a deal that handed 80% of the company to the Japanese conglomerate.

The job cuts come after SoftBank wrote down its investments in WeWork by $4.6bn and its founder, Masayoshi Son, admitted: "I made a bad investment decision and I am deeply remorseful".

But after revealing the loss, chief executive Masayoshi Son said: "My judgement around WeWork was not right in many ways".

More news: Justice must be done following deadly Burkina Faso attack
More news: Lady Gaga gets sinus infection, cancels Las Vegas concert
More news: Auburn police identify kidnapping suspect in Aniah Blanchard's disappearance

In response, a WeWork spokesperson said in an email that "new executive leadership is evaluating our operations and assets across all geographies, including Hong Kong".

WeWork is considering surrendering a portion of a recently signed lease in Wan Chai, near Hong Kong's central business district, people familiar with the matter said. Uber's stock price has skidded since its stock-market debut in May.

Son also promised a turnaround at WeWork, stressing that it was "not a sinking ship".

SoftBank's investing activities are propped up by other pillars of Son's empire including domestic telco SoftBank Corp, which on Tuesday reported a 9% rise in second-quarter operating profit, beating estimates, buoyed by its cash-cow mobile business.

The company did not publish its outlook for the year to March 2020, but uncertain roads lie ahead as shares in its key investments like Uber and Slack continue to slide.

But the questionable corporate governance practices at WeWork have turned out to be a major crisis for Softbank.

The Saudi Arabia-backed Vision Fund, which is run by ex-Deutsche Bank banker Rajeev Misra, has invested US$70.7 billion in 88 companies at the end of September. The remaining capital is now reserved for investments in existing portfolio companies (including investments in joint ventures with them), fixed distributions, and finance related expenses. But Son said Internet technology is incorporated into WeWork's concept.

Related Articles

  • 5 killed, 120 injured in Iran earthquake

    5 killed, 120 injured in Iran earthquake

    Rescuers have been dispatched to the region, officials said, with 30 homes reportedly destroyed at the epicenter of the quake . At least 312 people have been injured, although only 13 of them needed treatment in hospital, according to state TV.
    Manchester United win 'template' for future performances - Solskjaer

    Manchester United win 'template' for future performances - Solskjaer

    A deadly attacking trio of Mason Greenwood , Anthony Martial and Marcus Rashford all linked up well to put on an emphatic display. Asked if he had not wanted to heap pressure on the teenager during Martial's recent injury lay-off, Solskjaer said: "Not really".
    KPL match fixing case: All about CM Gautam, the former IPL cricketer

    KPL match fixing case: All about CM Gautam, the former IPL cricketer

    Goutam was supposed to represent the Goa cricket team in the Syed Mushtaq Ali T-20 tournament scheduled to begin from Friday. He was a regular in the Karnataka team and was deputy to Vinay Kumar, having also led the team in the latter's absence.
  • James Dean 'cast' in new movie, 64 years after death

    James Dean 'cast' in new movie, 64 years after death

    But many people, including celebrities, weren't happy about the casting, and expressed their frustration on Twitter . Ernst added that Dean's family considers the picture to be the star's fourth film, "a movie he never got to make".
    HK college student dies after vehicle  park fall: hospital

    HK college student dies after vehicle park fall: hospital

    Hong Kong is bracing for a weekend of rallies that have been planned in areas across the city, beginning Friday. Fellow students had been holding a vigil round the clock for Chow as doctors battled to save his life.
    Measles virus 'wipes out immunity to other infections'

    Measles virus 'wipes out immunity to other infections'

    It also prevents longer-term damage to the immune system that can lead to a resurgence of other diseases, she says. The monkeys lost, on average, 40 to 60 percent of the antibodies that protect them from other pathogens.
  • Actress Helen Mirren 'flattered' by comparison with Keanu Reeves' girlfriend

    Actress Helen Mirren 'flattered' by comparison with Keanu Reeves' girlfriend

    I had this auto with these speakers in the back; she turned me on to bands like Joy Division, the Violent Femmes. When asked about Keanu, she said that she knows him very well as he did a film with her husband.
    Kristen Bell to return as narrator for Gossip Girl reboot

    Kristen Bell to return as narrator for Gossip Girl reboot

    In 2008, The New York Times reported that the said show has become "one of the biggest influences on how young women spend". The Hollywood Reporter reports that the reboot will take place eight years after the original "website" went dark.

    Hawaii man dies after falling down lava tube in his garden

    As the lava flows , the top and sides of the stream harden, forming a tube in which the rest of the lava continues to flow. Police say the 71-year-old had apparently fallen about 22ft (7m) "through a soft area of ground".
  • Cell Phone Users Are Just Now Receiving Old Valentine's Day Texts

    Cell Phone Users Are Just Now Receiving Old Valentine's Day Texts

    Since none of the carriers have shared any details, it isn't clear exactly why the text messages were delayed for so long. It was alarming for one person when she received a text that said "need help" in the middle of the night.
    Jeff Sessions Expected To Announce Run For His Old Senate Seat

    Jeff Sessions Expected To Announce Run For His Old Senate Seat

    Lindsey Graham, R-S.C., who is close to Trump, said Sessions was "a great senator" but said he would stay out of the race. Fellow Alabama Republican Senator Richard Shelby already said he would endorse Sessions and give him full support.
    U.S.  has agreed to roll back trade tariffs, PRC says

    U.S. has agreed to roll back trade tariffs, PRC says

    But American officials are wary of giving up this leverage when unsure of China's commitment to carry out its end of the deal. Analysts caution that the deal might yet fall through, although the White House is eager for an agreement.