Softbank's $9 billion net loss last year has a lot to do with Uber and WeWork

SoftBank Group reported a record $8.9 billion net loss for the last financial year ended March 2020 and this had a lot to do with falling valuations of its marquee investments in Uber and WeWork.Flickr
  • SoftBank Group reported a record $8.9 billion net loss for the last financial year ended March 2020.
  • The Softbank Vision Fund had $75 billion invested in 88 startups but they were worth 7% less in value at the end of March.
  • The operating loss, before adding interest and tax, was $13 billion compared to a profit of $19 billion a year earlier.
SoftBank Group reported a record $8.9 billion net loss for the last financial year ended March 2020 and this had a lot to do with falling valuations of Masayoshi Son's marquee investments in Uber and WeWork.

The Softbank Vision Fund had $75 billion invested in 88 startups but they were worth 7% less in value at the end of March. The operating loss, before adding interest and tax, was $13 billion at the end of March, compared to a profit of nearly 2 trillion yen ( about $19 billion) a year earlier.

Softbank GroupFY20 loss
Net loss$8.9 billion
Operating loss$13 billion
Loss from Softbank Vision Fund $17.7 billlion

This is the first time in 15 years Softbank posted a loss because of ‘the deteriorating performance of its tech bets’. WeWork, the US-based realty company went under last year as a cloud of dirt exploded from under the carpet at a time when the company was looking to file for an IPO. As its financials were questioned, the value of WeWork dropped from $47 billion to $8 billion.
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Another one of its biggest tech bets – Uber has been on a downtrend since its listing. The market value of one of the most hallowed startups of all time is down 21.9% since its listing on Nasdaq in May 2019.

SoftBank announced its largest ever share buyback to prop up their value in March. Son has already pledged two of every five shares in Softbank as collateral for loans.

Jack Ma leaves the board

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Till date, Son’s most paid-off bet is considered to be the Chinese giant Alibaba. And now, the billionaire founder of Alibaba, Jack Ma, is set to leave the SoftBank board to focus on philanthropy. This will be the most high-profile exit from the Japanese investment group.

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