SoftBank Group profit plunges owing to WeWork turmoil
Japanese giant SoftBank Group suffered an operating loss of 6.4 billion in the second quarter, the company said on Wednesday, as investments in startups 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".
Masayoshi Son, Founder and CEO, Softbank
Net profit in the six months to September sank 49.8 percent to 421.6 billion yen on an operating loss of 15.6 billion 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 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 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 startup 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.
In India, SoftBank has deployed $10 billion in the Indian startup ecosystem, with plans to invest up to $4 billion more in the next two years in its hunt for unicorns and visionary companies. Some of its high profile investments include digital payments firm Paytm, hospitality chain Oyo Rooms, logistics courier service company Delhivery, and baby and kids store FirstCry.
Speaking to YourStory Founder and CEO Shradha Sharma at TechSparks 2019, Munish Varma, Managing Partner of SoftBank Investment Advisers, said, "We are constantly looking for companies that solve fundamental pain points that are playing in markets that are big markets, and that can grow even further, both within India and outside”.
(Disclaimer: Additional background information has been added to this PTI copy for context)
(Edited by Megha Reddy)