SoftBank posts $6.5b quarterly loss amid falling Uber, WeWork value

Japanese conglomerate SoftBank Group posted an operating loss of 704 billion yen (US$6.5 billion) in the quarter that ended September 2019. This is a plunge from the 706 billion yen (about US$6.5 billion) of operating income it recorded in the same period last year.

The loss came from its SoftBank Vision Fund and Delta Fund segment, which reported an operating loss of 970 billion yen (US$8.9 billion) for the quarter, down from the 392 billion yen (US$3.6 billion) of operating income the company recorded from the two funds in the same quarter a year ago.

Masayoshi Son / Photo credit: SoftBank

It was slightly offset by SoftBank’s recorded 266 billion yen (US$2.4 billion) operating income for the July to September quarter, excluding results from the two funds.

The Japanese investment giant said that its US$100 billion Vision Fund and US$6 billion Delta Fund segment recorded an unrealized loss of 537.9 billion yen (US$4.9 billion) from investments held at the end of the second quarter amid the falling value of WeWork, Uber, and Slack Technologies, among others.

In this period, SoftBank said it held 88 investments with a total cost of US$70.7 billion. Those investments, excluding exited ones, had a fair value of about US$77.6 billion, according to the company’s earnings release.

The company is also currently preparing for the full-scale launch of its SoftBank Vision Fund 2. Earlier this year, it was reported that SoftBank was having a difficult time raising money for the new fund due to WeWork’s unsuccessful attempt at an initial public offering and the falling valuations of its other major investments.

Just last month, WeWork announced that it had accepted a rescue package from SoftBank, which included US$5 billion in new financing, a US$3 billion tender offer for existing shareholders, and the Japanese company’s previous US$1.5 billion commitment.

Shares of Uber, one of SoftBank’s biggest bets, have also been hitting new lows leading up to the Japanese firm’s earnings release for the quarter.

SoftBank did not give out forecasts for the results of its operations for the current year, saying that they are difficult to project due to numerous uncertainties.

Currency converted from yen to US dollar: US$1 = 109 yen.