Masayoshi Son, Chairman and CEO of SoftBank Group at the SoftBank World 2018 event in Tokyo, Japan.
Kiyoshi Ota | Bloomberg | Getty Images
SoftBank CEO Masayoshi Son did not want to call WeWork a rescue, saying instead that the latest funding allowed his company to reduce the average share price it paid for the collaborating company. Nevertheless, he described it as an "exception" that will not happen again.
SoftBank will make "no investment to save," Son told investors on Wednesday, after the Japanese conglomerate reported its first quarterly loss in 1
Son acknowledged making some mistakes in his investment strategy and accepted that WeWork's dramatic fall in recent months has prompted some to question his judgment and the viability of SoftBank's massive Vision Fund. SoftBank recorded a write-down of $ 374.7 billion ($ 3.4 billion) on its WeWork investment about two weeks after taking 80% control of the company with a new $ 5 billion financing package.
WeWork was forced to withdraw its IPO in late September because of increasing losses and unwillingness on the part of public investors to finance the business. SoftBank exhaled former CEO Adam Neumann, who walked away with more than $ 1 billion, and installed Marcelo Claure, SoftBank's operations manager, as CEO. Son said there will be no future guarantees for start-ups with SoftBank.
T-Mobile CEO John Legere (R) and Sprint CEO Marcelo Claure pose for photos on the floor of the New York Stock Exchange, April 30, 2018.
Brendan McDermid | Reuters
Vision Fund has set aside about $ 80 billion in less than three years, investing heavily and pushing private technology companies to expand as quickly as possible. At Wednesday's conference call, Son addressed concerns that the fund is facing several portfolio failures.
"Is there any other similar concern? Yes, it actually is," Son said. "As a dog-running company and other portfolio companies, we can see similar problems on the surface."
While Son did not mention the name of the dog-running company, he refers to SoftBank's $ 300 million investment in Wag, which has continued to struggle and is now exploring a sale.
SoftBank also made a loss on its investment in ride-hailing company Uber, which has seen the stock plummet 40% since its May listing to a record low on Wednesday. But some major Vision Fund investments are still performing. Son highlighted the fund's investment in Slack as a success story amid the turbulence.
"In fact, they have increased about five times compared to our invested amount," Son said. He also said SoftBank is doing well with its investments in Guardant Health and its stake in 10x Genomics.
"There are many of them who give us profits," he said. "But still, market investors are becoming more cautious."
SE: SoftBank narrows from first loss in 14 years