SoftBank's Masayoshi Son says his judgement on WeWork was poor in many ways
Last month, SoftBank was forced to spend more than $10 billion to bail out WeWork after the U.S. company's IPO attempt flopped
- Nov 6, 2019,
- Updated Nov 6, 2019 6:17 PM IST
SoftBank Group Corp (9984.T) fell into the red in the second quarter for the first time in 14 years, with its gigantic Vision Fund suffering a 970 billion yen ($8.9billion) loss on plunging valuations of WeWork and Uber Inc (UBER.N).
Last month, SoftBank was forced to spend more than $10 billion to bail out WeWork after the U.S. company's IPO attempt flopped, and it said on Wednesday the fair value of its investment in the office-sharing startup decreased by $3.4 billion in the second quarter.
At a post-earnings briefing, Chief Executive Masayoshi Son said his judgement in dealing with WeWork had been poor in many ways, a remarkable admission for an executive well known for his ebullience.
Here are some of Son's comments, translated from Japanese:
On WeWork:
- Says his judgement on WeWork was poor in many ways, but the U.S. company is not a sinking boat
- Says in about 18 months the majority of WeWork offices will be profitable as occupancy increases
- SoftBank stopped new leases for WeWork a month ago and this may continue for three to four years, Son says
- Says he expects there will be a hockey stick recovery in WeWork profits
- Son says he was told off by SoftBank board members over WeWork
On WeWork founder Adam Neumann:
- Son says he overestimated Neumann's good side, turned a blind eye to things like corporate governance, and that he should have known better
- Says learned a harsh lesson from his experience with Neumann
On Vision Fund 2:
- Says Vision Fund 2 is starting investing with SoftBank's money
- Vision Fund 2 is going to be launched as scheduled, declined to discuss status of negotiations with potential investors
- Vision Fund 2 to be a similar size to the first $100 billion fund
On IPO pipeline:
- Says has started to think SoftBank should be more cautious about timing of IPOs for companies like Uber and Slack
- Says there is no change to the trend that multiple portfolio companies will go public every year
- Says for companies that are getting closer to turning a profit, SoftBank will support them in going public
SoftBank Group Corp (9984.T) fell into the red in the second quarter for the first time in 14 years, with its gigantic Vision Fund suffering a 970 billion yen ($8.9billion) loss on plunging valuations of WeWork and Uber Inc (UBER.N).
Last month, SoftBank was forced to spend more than $10 billion to bail out WeWork after the U.S. company's IPO attempt flopped, and it said on Wednesday the fair value of its investment in the office-sharing startup decreased by $3.4 billion in the second quarter.
At a post-earnings briefing, Chief Executive Masayoshi Son said his judgement in dealing with WeWork had been poor in many ways, a remarkable admission for an executive well known for his ebullience.
Here are some of Son's comments, translated from Japanese:
On WeWork:
- Says his judgement on WeWork was poor in many ways, but the U.S. company is not a sinking boat
- Says in about 18 months the majority of WeWork offices will be profitable as occupancy increases
- SoftBank stopped new leases for WeWork a month ago and this may continue for three to four years, Son says
- Says he expects there will be a hockey stick recovery in WeWork profits
- Son says he was told off by SoftBank board members over WeWork
On WeWork founder Adam Neumann:
- Son says he overestimated Neumann's good side, turned a blind eye to things like corporate governance, and that he should have known better
- Says learned a harsh lesson from his experience with Neumann
On Vision Fund 2:
- Says Vision Fund 2 is starting investing with SoftBank's money
- Vision Fund 2 is going to be launched as scheduled, declined to discuss status of negotiations with potential investors
- Vision Fund 2 to be a similar size to the first $100 billion fund
On IPO pipeline:
- Says has started to think SoftBank should be more cautious about timing of IPOs for companies like Uber and Slack
- Says there is no change to the trend that multiple portfolio companies will go public every year
- Says for companies that are getting closer to turning a profit, SoftBank will support them in going public