TOKYO – SoftBank Group booked a 789 billion yen (S$7.1 billion) quarterly loss on Thursday, its fourth straight quarter in the red, as the Japanese tech giant wrote down the value of tech investments and took a hit from the bankruptcy of the once high-flying WeWork.
The results underscore the volatility and risk inherent in founder Masayoshi Son’s strategy of betting big on often risky start-ups. WeWork sought US bankruptcy protection on Monday, cementing the remarkable fall of a start-up that had once been valued at US$47 billion (S$64 billion).
The loss was also a reminder of how even the likes of SoftBank – famous for a focus on cutting-edge technology – can be brought to earth by workaday problems like currency rates. The Japanese conglomerate said it was squeezed by weakness in the yen that drove up costs on its US dollar-denominated debt.
Its 789 billion yen net loss for the three months to end-September compares with a 3.01 trillion yen profit a year ago when it sold down a large portion of its stake in Chinese e-commerce giant Alibaba.
Its Vision Fund investment unit, meanwhile, booked an investment profit of 21.4 billion yen in the latest quarter, after posting a 160 billion yen profit three months earlier.
SoftBank chief financial officer Yoshimitsu Goto said he believed the group had seen the worst and was moving towards profitability. He said that chip designer Arm, which went public during the quarter, would be the new driver of value for SoftBank.
WeWork, whose meteoric rise and fall reshaped the office sector globally, sought United States bankruptcy protection after its bets on companies using more of its office-sharing space soured.
SoftBank said it exchanged unsecured WeWork notes into shares and convertible bonds and reflected a 21.6 billion yen loss from the transaction in the first half.
While SoftBank has largely written down billions of dollars of investment in WeWork over the years, it said on Thursday that its pledge to provide credit support for WeWork raised the investment firm’s liabilities by 57.5 billion yen in the last quarter. REUTERS
