by Anton Bridge
TOKYO, Nov 9 (Reuters) – SoftBank Group reported a quarterly loss of $5.2 billion (4.87 billion euros) on Thursday, its fourth consecutive quarter in the red, hit by the WeWork bankruptcy , once one of its best-performing investments.
This bankruptcy was a reminder of the volatility inherent in founder Masayoshi Son’s strategy, which consists of betting big on often risky start-ups.
WeWork, the office-sharing startup that reached its peak valuation of $47 billion, filed for bankruptcy protection on Monday.
SoftBank posted a net loss of 789 billion yen in the three months ended September. The figure contrasts with the 3 trillion yen profit made a year earlier from the sale of a large part of SoftBank’s stake in Chinese e-commerce giant Alibaba.
The group recorded 234.4 billion yen in losses related to the WeWork exposure during the first half of the year.
WeWork’s bankruptcy is a “great shame,” Chief Financial Officer Yoshimitsu Goto said at a briefing, adding that the company must learn from what went wrong to make future business easier. investment.
However, he expressed his optimism, believing that SoftBank, after having “hit rock bottom”, was progressing on the path to profitability.
NEW SOURCE OF INCOME
Chip designer Arm, which went public during the quarter, would be the new value creation engine for SoftBank, he said.
Arm recorded a capital surplus of $4.65 billion from the proceeds of its IPO.
The company has also “cautiously relaunched” more active investment, Yoshimitsu Goto said, emphasizing that it is selective and focused on AI and growth.
Its Vision Fund investment unit recorded an investment profit of 21.4 billion yen in the latest quarter, up from 160 billion yen three months earlier.
SoftBank said it swapped WeWork unsecured bonds for shares and convertible bonds, recording a loss of 21.6 billion yen on the transaction in the first half.
The bank, which has largely written down billions of dollars of investment in WeWork over the years, said Thursday that its commitment to providing credit support for WeWork increased liabilities by 57.5 billion yen over the last quarter. (Reporting by Anton Bridge; with contributions from Miyoung Kim; French version by Dagmarah Mackos, editing by Kate Entringer)
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