Meeting with WeWork and Uber, SoftBank’s fourth-quarter profit plunged 99%

Tram Ho

According to the financial report released on February 12, the operating profit of Japanese technology group was 2.59 billion yen (23.6 million USD) in the last 3 months of 2019, down 99% over the same period. last year. The biggest factor that made the company’s profits drop sharply was Vision Fund’s losses. The fund recorded a loss of 225 billion yen (US $ 2 billion) in the last quarter, mainly due to the bad business of WeWork and Uber.

In the financial statement publication, billionaire Masayoshi Son also acknowledged the weakness of Vision Fund, along with many bad news that disappointed potential investors. Last year, SoftBank signed a memorandum of understanding with more than 10 companies to set up Vision Fund 2. At that time, the company said it planned to raise US $ 108 billion from major companies such as Apple, Microsoft, Foxconn and Standard. Chartered.

Gặp hạn vì WeWork và Uber, lợi nhuận quý IV của SoftBank lao dốc 99% - Ảnh 1.

However, the failure of WeWork and Uber has worried investors. Last fall, SoftBank spent about US $ 10 billion to “rescue” WeWork after a failed IPO attempt. Uber, meanwhile, has fallen 8% since its initial public offering in May.

Masayoshi Son said: “At this point, I think the size of the next fund should shrink a little, because we have made so many people nervous.” When asked whether Vision 2 Fund could raise capital entirely from SoftBank’s funds, Son replied: “We can invest by ourselves, but we have partners who want to cooperate, so the source capital will be flexible. ” The billionaire also said that SoftBank shares are being traded at a discount of more than 50% and should be priced at 12,097 yen (110 USD).

Currently, SoftBank is starting to face external pressures. Earlier this month, proactive investor Elliott Management revealed that it had a significant stake in the group and is urging SoftBank to change to improve the current situation. Son said he had meetings with Elliott two weeks ago, describing the discussion as “very open” and “good”.

Elliott Management and many analysts want to see more transparency from the Vision Fund. According to Son, Vision Fund is regulated under English law, so they follow all the rules for the operation of the fund, but want to make more efforts to enhance governance and transparency. . ”

Asked to elaborate on the Vision Foundation’s investment approach, he said, “nearly 30 companies in the portfolio have made a profit and 30 companies have suffered losses, including those that have not yet been listed. listing. ” He declined to provide details about these private companies, as this is a confidentiality clause in the agreement.

SoftBank’s earnings report comes less than 24 hours after the US court approved a merger of US $ 26 billion by T-Mobile and Sprint, a US carrier acquired by SoftBank, nearly 10 years ago. After this information, SoftBank shares rose sharply on Tokyo floor.

Atul Goyal, an analyst with Jefferies, said: “Since 2012, Sprint has brought a lot of trouble to SoftBank. The technology group has tried to revive the network but it has not been effective.” Therefore, “ending” Sprint will help SoftBank get rid of the 44 million USD debt on the books.

Refer to CNN

 

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Source : Genk