SoftBank warns of huge losses as Vision Fund value collapses
The Japanese company said it expected an operating loss of 1.35 trillion yen ($12.5 billion) in its fiscal year through March 31, 2020. That compares with an operating profit of more than 2 trillion yen the previous year.
“The difference in operating income is mainly attributable to the expected recording of [an] investment loss of approximately 1.8 trillion yen [$16.7 billion] at SoftBank Vision Fund … resulting from a decrease in the fair value of investments due to the deteriorating market environment,” SoftBank (SFTBF) said in a statement.
Big losses on other SoftBank investments held outside the $100 billion Vision Fund, notably bankrupt internet satellite startup OneWeb, and troubled coworking provider WeWork, are also expected to weigh heavily on earnings, it added.
Sweeping restrictions on work, travel and social distancing aimed at tackling the coronavirus pandemic have piled pressure on SoftBank’s global tech portfolio, which also includes Uber (UBER), Didi, OYO and Grab.
SoftBank founder and CEO Masayoshi Son, who has cast himself as a bold, visionary investor, has been forced to play defense after some of his biggest bets collapsed in value. Last month he made a surprise announcement of what amounts to a fire sale of $41 billion worth of assets to buy back SoftBank shares and reduce the company’s heavy debt load.
— More to follow.