Softbank lost more than 6 billion USD because of Uber and WeWork
(CNN) SoftBank founder Masayoshi Son's strategy - venture capital investments in developing startups - made them suffer big losses.
Japanese telecommunications giant SoftBank today (November 6) released its financial report for the third quarter, with an operating loss of 704 billion yen (6.5 billion USD), far exceeding 48 billion yen forecast by analysts. . This is the first quarter they lost in 14 years. The same period last year, SoftBank profit of 706 billion yen.
SoftBank technology investment funds, including Vision Fund, lost 970.3 billion yen (8.9 billion USD). Vision Fund owns stakes in companies like Uber, WeWork, Slack and many other large startups.
Founder SoftBank Masayoshi Son.Pic: Reuters
In the third quarter, Uber stock fell 34%. Last month, SoftBank was also forced to spend more than $ 10 billion rescuing the WeWork workspace sharing application after a failed IPO. Slack office messaging platform stocks, blood testing company Guardant Health and many other listed businesses in Vision Fund's portfolio all fell last quarter.
Vision Fund is now run by former Deutsche Bank leader Rajeev Misra. The fund has invested US $ 70.7 billion in 88 companies. The value of these shares is currently 77.6 billion USD.
As the market increasingly suspects the profitability of many startups, SoftBank is having trouble making IPOs for the startups it is investing. This makes their capital stuck and it is difficult to continue investing. The value of the company's stake in Uber, Slack Technologies and Guardant Health last quarter dropped.
Nonetheless, SoftBank's other businesses continued to grow, offsetting investment. Operating profit of core telecommunication segment increased by 9%, thanks to mobile services. SoftBank also did not release its business results for this year, citing too many instability factors.