2023-11-09 06:28:43
SoftBank Group reported a quarterly loss of $5.2 billion on Thursday, its fourth consecutive quarter in the red, as the Japanese tech giant wrote down the value of its technology investments and suffered the blow from the bankruptcy of WeWork, a company once very flourishing.
The findings highlight the volatility and risk inherent in founder Masayoshi Son’s strategy of betting big on often risky start-ups. The loss also served as a reminder that even companies like SoftBank, known for their focus on cutting-edge technology, can face everyday issues like exchange rates.
The Japanese conglomerate said it had been hurt by the weak yen, which led to higher costs of its dollar-denominated debt.
SoftBank reported a net loss of 789 billion yen ($5.2 billion) for the three months ending at the end of September, compared with a profit of 3.01 trillion yen a year earlier, when it sold a large part of its stake in Chinese e-commerce giant Alibaba.
Its Vision Fund investment unit, meanwhile, recorded an investment profit of 21.4 billion yen in the latest quarter, after posting a profit of 160 billion yen three months earlier.
These mixed results came as the group managed to complete the long-planned IPO of chip designer Arm, although the proceeds from this operation were not recorded as a profit, Arm remains a subsidiary.
WeWork, whose meteoric rise and fall reshaped the office sector globally, filed for U.S. bankruptcy protection on Monday after its bets on increased use of its office space office sharing by companies has proven disappointing.
SoftBank said it swapped WeWork’s unsecured notes for shares and convertible bonds and recorded a loss of 21.6 billion yen from the transaction during the first half of the year.
Although SoftBank has largely written down billions of dollars invested in WeWork over the years, it said Thursday that its commitment to providing credit support for WeWork had increased the investment firm’s liabilities by 57.5 billion yen during the last quarter.
($1 = 151.0200 yen) (Reporting by Anton Bridge; Additional reporting by Miyoung Kim; Editing by David Dolan and Tom Hogue)
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