SoftBank CEO Son says his judgement on WeWork was poor in many ways
(Reuters) - SoftBank Group Corp fell into the red in the second quarter for the first time in 14 years, with its gigantic Vision Fund suffering a 970 billion yen ($8.9 billion) loss on plunging valuations of WeWork and Uber Inc . Last month, SoftBank was forced to spend more than $10 billion to bail out WeWork after the U.S. company's IPO attempt flopped, and it said on Wednesday the fair value of its investment in the office-sharing startup decreased by $3.4 billion in the second quarter.
(Reuters) - SoftBank Group Corp <9984.T> fell into the red in the second quarter for the first time in 14 years, with its gigantic Vision Fund suffering a 970 billion yen ($8.9 billion) loss on plunging valuations of WeWork and Uber Inc
Last month, SoftBank was forced to spend more than $10 billion to bail out WeWork after the U.S. company's IPO attempt flopped, and it said on Wednesday the fair value of its investment in the office-sharing startup decreased by $3.4 billion in the second quarter.
At a post-earnings briefing, Chief Executive Masayoshi Son said his judgement in dealing with WeWork had been poor in many ways, a remarkable admission for an executive well known for his ebullience.
Here are some of Son's comments, translated from Japanese:
- Says his judgement on WeWork was poor in many ways, but the U.S. company is not a sinking boat
- Says in about 18 months the majority of WeWork offices will be profitable as occupancy increases
- SoftBank stopped new leases for WeWork a month ago and this may continue for three to four years, Son says
- Says he expects there will be a hockey stick recovery in WeWork profits
- Son says he was told off by SoftBank board members over WeWork
On WeWork founder Adam Neumann:
- Son says he overestimated Neumann's good side, turned a blind eye to things like corporate governance, and that he should have known better
- Says learned a harsh lesson from his experience with Neumann
On Vision Fund 2:
- Says Vision Fund 2 is starting investing with SoftBank's money
- Vision Fund 2 is going to be launched as scheduled, declined to discuss status of negotiations with potential investors
- Vision Fund 2 to be a similar size to the first $100 billion fund
On IPO pipeline:
- Says has started to think SoftBank should be more cautious about timing of IPOs for companies like Uber and Slack
- Says there is no change to the trend that multiple portfolio companies will go public every year
- Says for companies that are getting closer to turning a profit, SoftBank will support them in going public
(Editing by Susan Fenton)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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