SoftBank Group profit plunges owing to WeWork turmoil

November 06, 2019

Email

This Sept. 30, 2019 file photo shows a WeWork sign on a building in New York. — AP
This Sept. 30, 2019 file photo shows a WeWork sign on a building in New York. — AP

Japanese giant SoftBank Group suffered an operating loss of $6.4 billion in the second quarter, it said on Wednesday, as investments in start-ups such as WeWork and Uber took a massive hit.

In the three-month period ending September 30, operating losses hit a whopping 704.4 billion yen ($6.4 billion).

The firm said first-half operating losses from its Vision Fund and Delta Fund came to 572.6 billion yen, largely “due to a decrease in the fair values of investments including Uber and WeWork and its three affiliates”. Net profit in the six months to September sank 49.8 per cent to 421.6bn yen on an operating loss of 15.6bn yen.

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.

SoftBank's flamboyant founder Masayoshi Son has faced renewed scrutiny of his investment acumen in the wake of WeWork's dramatic fall from grace.

Last month, SoftBank confirmed that it was injecting billions of dollars into WeWork, once hailed as a shining unicorn valued at $47 billion at the start of the year.

The start-up has gone from an investor darling to cancelling its IPO and seeing its co-founder Adam Neumann pushed out, albeit with a reported package of more than $1.5 billion.