When it came to the stage on Wednesday in Tokyo, to reveal a quarterly loss of nearly 6 billion euros, Masayoshi Son, the boss of Softbank Group, had projected on the screen of the presentation the image of a rough sea with big waves.
"I heard that Softbank was in danger after WeWork's problems," the leader quipped. "Some have spoken of bankruptcy, a new burst of a bubble," he continued before taunting the analysts who would understand nothing of his investment philosophy and his performance. An hour later, he had a picture of calm sea under a radiant sun. "There is no storm. Everything is under control. We will not change course, "he said. In the room, some sneers flared up.
Softbank Group, the holding that Masayoshi Son has turned into an investment fund after initially developing into telecoms, has just recorded its worst financial results of the last fourteen years. In the quarter from July to September, the company recorded an operating loss of 704 billion yen, or 5.8 billion euros. A spectacular turnaround from the 706 billion yen in profits it posted a year ago, in the same quarter.
Also driven by the bubbling "Masa", but funded by Saudi Arabia and Abu Dhabi, the Vision Fund, the largest tech investment fund in the world, has revealed an operating loss of 970 billion yen ($ 8 billion). euros).
Blinded by Adam Neumann's enthusiasm
Having generally focused on the same companies, the two entities suffer from
the brutal fall of valuation of WeWork
, the American start-up of office rental, Uber, the American giant of the VTC, and a handful of start-ups that must, according to Masayoshi Son, upset, eventually, their respective industries.
The WeWork fiasco was particularly painful. Following the revelations about the management style of its former CEO Adam Neumann, and the surge of doubts about its economic model, the group saw its value fall from $ 47 billion in the spring to $ 7.5 billion last week . "My judgment was bad and I deeply regret it," conceded Masayoshi Son before admitting that he had perhaps been blinded by Neumann's enthusiasm, since thanking him, and had failed to control his chaotic governance.
After this brief moment of humility, the boss of Softbank quickly recovered and explained that WeWork remained a promising concept. He also assured that his last injection of capital ($ 9.5 billion) in the start-up in October was in no way "a rescue" as the journalists wrote but rather the clever repurchase of securities of the group at one quarter of their value. New smiles in the audience. "I hear you laugh," said "Masa", which announced a freeze on WeWork's investment in new office buildings, now 80% owned by Softbank, and promised the accession to profitability. "What a genius of sales! ", Smiled on Twitter, Tim Culpan, a columnist Bloomberg.
Still trying to explain why he was so misunderstood by the markets, Masayoshi Son said he no longer focuses on sales levels, Ebitda or numbers of active users to assess the health of a company but that it focused on the value created for shareholders. And, according to its own calculations, the value would have continued to increase in recent months for the shareholders of Softbank Group or the Vision Fund. He notably pointed out the continuous progress of the Chinese giant Alibaba, of which Softbank still holds 26%. On the other hand, it was much less prolific on its dozens of other small unlisted start-ups on which it bet so much but of which it is impossible to estimate the exact valuation as they were almost exclusively built on cash injections of Softbank or Vision Fund.
He did not spend much time on the Wag case, the "Uber of the dog walk" that scares analysts. "They said I was crazy about investing in this service," the billionaire just dropped. In 2018, this California platform, which connects dog owners and walkers for $ 15 an hour, sought to raise $ 75 million to grow. Masayoshi Son had written them a check for $ 300 million, valuing the SME at $ 650 million. Less than two years later, Wag struggles to grow and desperately seeks a new master.