The jolts shaking SoftBank's Silicon Valley empire

FILE PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son bows his head after his presentation at a news conference in Tokyo, Japan, November 5, 2018.  REUTERS/Kim Kyung-Hoon


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This week: SoftBank's Silicon Valley empire is feeling some jolts

For the past couple of years, Silicon Valley's vast constellation of startups, investors and entrepreneurs has revolved around one giant sun: SoftBank.

The Japanese conglomerate's $100 billion Vision Fund, launched in 2017, instantly made SoftBank and CEO Masayoshi Son the most powerful forces in tech. Getting an investment from Softbank was as close to a golden ticket as a startup could get. As we wrote in April in our inaugural list of 100 people transforming the world of business, "Masa," as Son is known, emerged as Silicon Valley's new kingmaker.

But two of Masa's biggest bets are now looking very shaky. SoftBank is reportedly $600 million underwater on its Uber investment, as the ride-hailing company's rough reception in the public markets has crushed its stock price. And WeWork, the popular office space sharing company that SoftBank has poured billions into, is faring even worse, with reports that the company could IPO at considerable discount to the $47 billion valuation that SoftBank most recently invested at.

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The big question now is whether these jolts could cause turbulence across Silicon Valley. SoftBank's "winner take all" strategy of investing has long had its critics, as Troy Wolverton reports. One Silicon Valley VC used the colorful retro-metaphor of the needle coming off the record to describe the imminent reckoning in Silicon Valley when it becomes clear that SoftBank's rich valuations don't match reality.But the counter-argument is that regardless of what happens with Uber or WeWork, there is so much capital looking for returns in a low-interest rate environment, that Silicon Valley tech startups won't be starved for funds anytime soon. As for Son and SoftBank, a Stanford business lecturer tells Wolverton: Betting against Masa has historically been a bad idea.Advertisement

Read the full story here:

WeWork and Uber are giving SoftBank a black eye, but that doesn't mean Vision Fund II is in trouble, experts say

Masayoshi Son

Neumann's fortune

One person who will most likely feel the effects of WeWork's shrinking valuation is founder and CEO Adam Neumann.

While we don't have the exact details on Neumann's stake in WeWork, the company's prospectus provides some insight into how much Neumann stands to lose if WeWork's valuation is slashed from $47 billion to $15 billion. As Julie Bort writes, Neumann's fortune could be a couple of billion dollars smaller - but he'll still be worth billions. Advertisement

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WeWork's shrinking IPO will erase billions from CEO Adam Neumann's payday, but he'll still likely come out a multibillionaire

adam neumann wework we company ceo

What's next for IBM

Seven years into her stewardship of IBM, CEO Ginny Rometty has made some bold bets, such as the $34 billion acquisition of Red Hat.

She's also developed a deep bench of talent from inside and outside the company. And while there are no signs that the 62-year-old Rometty plans to retire anytime soon, there's already speculation about who might eventually succeed her in the top job.Advertisement

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Meet the 14 power players of IBM, playing key roles in CEO Ginni Rometty's bid to dominate the $1 trillion hybrid cloud market - and a few who might take over for her one day

14 execs key to IBM cloud business 4 3

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