SoftBank, the Japanese conglomerate, has reported a quarterly loss of $6.2 billion due to the impact of WeWork’s bankruptcy. The company’s net sales for the September quarter were $11 billion, slightly higher than expected, but it still suffered a substantial loss. SoftBank attributed the loss to a weaker yen, which negatively affected its U.S.-dollar denominated liabilities.
Despite the overall loss, SoftBank’s Vision Fund posted its second consecutive quarter of investment gains. This was primarily driven by a gain from the sale of shares in chip designer Arm. However, the fund also recorded a pre-tax loss of $2.5 billion for the quarter, largely due to the financial support provided to WeWork before its bankruptcy filing.
WeWork’s bankruptcy has raised concerns about SoftBank’s investment strategy, with critics citing the lack of discipline in some of the Vision Fund’s investments. The founder of SoftBank, Masayoshi Son, once hailed WeWork as a leader in the future of work. The company’s CFO, Yoshimitsu Goto, acknowledged the need to learn from the WeWork situation and emphasized the importance of accepting reality in future investment activities.
SoftBank’s flagship tech investment arm, the Vision Fund, has faced challenges in recent years, including a record loss of $32 billion in the previous fiscal year. However, there have been signs of a recovery, with the fund posting its first investment gain in five quarters in the June quarter. SoftBank is now focusing on artificial intelligence as its main investment strategy, aiming to be at the forefront of the AI revolution.
Arm, the chip designer acquired by SoftBank in 2016, recently went public in the U.S., valuing the company at over $50 billion. While Arm reported a rise in revenue for the September quarter, its guidance for the December quarter disappointed investors, leading to a decline in its share price.
Overall, SoftBank remains optimistic about its future prospects and believes it is moving towards positive figures. The company is determined to learn from its past mistakes and navigate the challenging environment to secure successful investments in the AI sector.
Sources:
– [SoftBank Posts $6.2B Quarterly Loss as WeWork’s Bankruptcy Hits](https://www.cnbc.com/2022/11/10/softbank-earnings-q2-2022.html)
– [SoftBank Founder Masayoshi Son is pictured here in 2019 during an earnings presentation.]
