SoftBank’s Masayoshi Son is doing just fine

If you scan the news, it would seem like the world is crashing down on Masayoshi Son. SoftBank Group, the Japanese conglomerate he founded, recorded its first quarterly loss in 14 years, the headlines hollered when it filed results last month.

The US$6.5 billion loss stems from write-downs on losing bets in WeWork and Uber made by the SoftBank Vision Fund, whose investment decisions are signed off by Son himself.

Illustration by Tech in Asia, from photo by Softbank.

The losses have made him introspective. “In the case of WeWork, I made a mistake,” he told investors. “I won’t make any excuses. It was a very harsh lesson.”

Unsurprisingly, people are latching onto those big numbers as well as Son’s comments. Succumbing to short-termism is easy if you’re a journalist facing the pressure of deadlines or if you’re a public market investor seeking quick gains.

A dig into the past, however, shows that Son is doing just fine. The massive deficits, wild bets, and gut-based investment decisions are hardly unusual for a man who built a fortune from nothing by making risky moves.

Jack Ma’s animal smell

He has been remarkably consistent in this regard. In 1998, he made a US$400 million investment in online trading platform E-Trade after one phone call with the company’s founder.

He has made similar intuitive bets on many other entrepreneurs. “It was the look in his eye, it was an ‘animal smell’,” said Son of his decision to back Alibaba’s Jack Ma when they first met in 2000.

Likewise, he invested US$2 million in Yahoo for a 5% stake when it was nothing, after having take-out pizza and soda with the young founders. He later doubled down with US$355 million in subsequent years before its public listing.

Jack Ma / Photo credit: Alibaba

He has been pushing his investees to go higher and faster for as long as people can remember. David Wei, a former CEO of Alibaba, recalled an instance when he was explaining business plans to Son, only to be told, “David, can this be 10 times bigger?”

Son’s huge bets often flop. At the height of the dot-com bubble, his net worth fell from US$76 billion in 2000 to US$1.1 billion in 2003, partly because of his failed investments in Webvan, Kozmo, SportsBrain, and More.com. As a result, financial analysts and doomsayers had bet against SoftBank.

But Son still stands today, and that’s because he’s a high-stakes – but not reckless – gambler. His net worth is back to US$20.4 billion. SoftBank Group is now worth US$89 billion, and it’s forecasted to hit US$44 billion in revenue for the financial year.