December 1, 2023

Bobbys Brane

Bobbys Brane – Business & Tech Blog

SoftBank books $5.2 billion quarterly loss as investments and weak yen bite By Reuters

2 min read

© Reuters. A man talks on the phone as he stand in front of an advertising poster of the SoftBank telecommunications company in Tokyo October 16, 2015. REUTERS/Thomas Peter/File Photo

By Anton Bridge

TOKYO (Reuters) -SoftBank Group booked a $5.2 billion quarterly loss on Thursday, its fourth straight quarter in the red, as the Japanese tech giant wrote down the value of tech investments and took a hit from the bankruptcy of the once high-flying WeWork.

The results underscore the volatility and risk inherent in founder Masayoshi Son’s strategy of betting big on often risky start-ups. The loss was also a reminder of how even the likes of SoftBank (TYO:) – famous for a focus on cutting-edge technology – can be brought to earth by workaday problems like currency rates.

The Japanese conglomerate said it was squeezed by weakness in the yen that drove up costs on its dollar-denominated debt.

SoftBank reported a 789 billion yen ($5.2 billion) net loss for the three months to end-September, compared with a 3.01 trillion yen profit a year earlier when it sold down a large portion of its stake in Chinese e-commerce giant Alibaba (NYSE:).

Its Vision Fund investment unit, meanwhile, booked an investment profit of 21.4 billion yen in the latest quarter, after posting a 160 billion yen profit three months earlier.

The downbeat results came even as the group managed to pull off the long-anticipated initial public offering (IPO) of chip designer Arm, although the proceeds from that did not count as earnings as Arm remains a subsidiary.

WeWork, whose meteoric rise and fall reshaped the office sector globally, sought U.S. bankruptcy protection on Monday after its bets on companies using more of its office-sharing space soured.

SoftBank said it exchanged unsecured WeWork notes into shares and convertible bonds and reflected a 21.6 billion yen loss from the transaction in the first half.

While SoftBank has largely written down billions of dollars of investment in WeWork over the years, it said on Thursday its pledge to provide credit support for WeWork increased the investment firm’s liabilities by 57.5 billion yen last quarter.

($1 = 151.0200 yen)

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