SoftBank Billionaire Masayoshi Son Humbled By $4.6 Billion WeWork Write Down

By Carlie Porterfield, Contributor

Topline: Japan’s second-richest person and SoftBank Group CEO Masayoshi Son struck a humble tone after the mobile telecom and investment firm announced its first quarterly loss in 14 years on Wednesday.

  • SoftBank revealed the $6.45 billion loss for the quarter ended September 30 after announcing massive write downs on Son’s high-profile investments, including embattled office space startup WeWork.
  • Two weeks ago, Softbank agreed to a $9.5 billion package to rescue WeWork after it faced a cash crunch following scrapped plans for an initial public offering
  • The Tokyo-based group told investors on Tuesday that it had taken a $4.6 billion charge on WeWork alone.
  • SoftBank also lost money in their investment in ride-sharing group Uber, whose share price has slumped below its IPO price and hit an all-time low on Tuesday.
  • These losses have put Son’s plan to launch a new $108 billion successor to the $100 billion Vision Fund at risk and have prompted investor scrutiny of SoftBank’s debt pile.  

Crucial quote: “My investment judgment was poor in many ways, and I am reflecting deeply on that,” Son told reporters at the results press conference, according to Reuters.

Key background: Masayoshi Son established his reputation as a legendary investor and his fortune with early bets on Yahoo and Alibaba. Now his deal-making instincts have been called into question following WeWork’s dramatic fall from grace.

WeWork’s valuation soared to $47 billion with a SoftBank-backed funding round in January, but plunged to just $7.8 billion in September ahead of the effective ouster of chief executive Adam Neumann and Son’s rescue of the troubled co-working space. Son’s aggressive tech investments up to now have been supported by profits from one of his subsidiaries, Japanese telecom network SoftBank Corp. The group could face further write-downs as Uber’s shares continue to dip.