- SoftBank Corporation, a Japanese investment conglomerate, is headed for a huge loss. SoftBank Group said it sees a loss of 16.5 billion dollars for its $100 billion Vision Fund, according to a Reuters report.
SoftBank Corporation, a Japanese investment conglomerate, is headed for a huge loss. SoftBank Group said it sees a loss of 16.5 billion dollars for its $100 billion Vision Fund, according to a Reuters report.
The record loss for FY 20 is due to ‘deteriorating tech bet results.’ Meanwhile, the whole company will see a loss of $12.5 billion. SoftBank’s biggest loss came from the collapse of one of its favorite bets-WeWork.
WeWork, the US-based real estate agency, came down last year when a dirt storm burst from under the carpet at a time when the company was planning to apply for an IPO. The valuation of WeWork plummeted from $47 billion to $8 billion, as its financials were challenged.
SoftBank has also recently withdrawn its $3 billion tender for WeWork. Yet this isn’t the only project SoftBank Chairman Masayoshi Son is concerned about. His star investment in India, OYO, has also proceeded to go on sour.
The Indian hospitality unicorn OYO has been under the scanner after hoteliers complained that dues and other issues had not been paid. OYO is hailed as the hot investment by SoftBank in India, and developed at a breakneck pace, kicking up dirt along the way. Critics have compared OYO to WeWork after multiple troubles.
Several reports have been published that it was Son who pressured OYO on the rapid growth process but soon after the WeWork fiasco asked it to focus on profitability.
Recently, The owner of WeWork, The We Corporation, sued SoftBank Group, challenging the decision of its largest shareholder to terminate a $3 billion offer for shareholdings in the office-space sharing business.
The complaint was brought by an independent two-member special committee of The We Company’s board, alleging SoftBank had violated its contractual obligations by dropping the tender offer.
“The Special Committee recognizes that SoftBank seeks to put its own interests ahead of those of WeWork’s minority stockholders,” it said in the complaint brought before Delaware’s Chancery Court.
Last week, SoftBank said the planned tender for additional WeWork shares was terminated, citing criminal and civil investigations in the company, its inability to restructure a joint venture in China and the effects of the coronavirus pandemic.