Thursday, February 29, 2024

SoftBank books $5.2 billion quarterly loss as WeWork files for bankruptcy

SoftBank Group booked a $5.2 billion quarterly loss on Thursday, its fourth straight quarter in the red, as the Japanese giant took a hit from the bankruptcy of the once high-flying WeWork and wrote down the value of tech investments.

It was a fresh reminder of the volatility inherent in founder Masayoshi Son’s strategy of betting big on often risky start-ups. WeWork sought U.S. bankruptcy protection on Monday, cementing the remarkable fall of a start-up that had once been valued at $47 billion.

The results also showed how unfavourable currency rates can deal heavy blows big companies such as SoftBank. Weakness in the yen drove up the cost of the Japanese conglomerate’s dollar-denominated debt.

ALSO READ: How WeWork founder Adam Neumann’s wealth grew while the company tumbled. Details

SoftBank reported a 789 billion yen ($5.2 billion) net loss for the three months to end-September, compared with a 3.0 trillion profit a year earlier when it sold down a large portion of its stake in Chinese e-commerce giant Alibaba.

Its Vision Fund investment unit, meanwhile, booked an investment profit of 21.4 billion yen in the latest quarter, after posting a 160 billion yen profit three months earlier.

SoftBank CFO Yoshimitsu Goto told a briefing he believed the group had seen the worst and was moving towards profitability. He said that chip designer Arm, which went public during the quarter, would be the new driver of value for SoftBank.

WeWork, whose meteoric rise and fall stunned investors, sought bankruptcy protection after its bets on companies using more of its office-sharing space soured.

SoftBank said it had exchanged unsecured WeWork notes into shares and convertible bonds, logging a 21.6 billion yen loss from the transaction in the first half.

While SoftBank has largely written down billions of dollars of investment in WeWork over the years, it said on Thursday its pledge to provide credit support for WeWork increased the investment firm’s liabilities by 57.5 billion yen last quarter.

Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

This story has been published from a wire agency feed without modifications to the text.

Catch all the Corporate news and Updates on Live Mint.
Download The Mint News App to get Daily Market Updates & Live Business News.


Updated: 09 Nov 2023, 02:53 PM IST

#SoftBank #books #billion #quarterly #loss #WeWork #files #bankruptcy

Related Articles


Please enter your comment!
Please enter your name here

Latest Articles