SoftBank reports $6.2bn loss

SoftBank Group Corp., a prominent Japanese technology company, reported a substantial loss of 931 billion yen ($6.2 billion) in the July-September quarter. This marked a significant reversal from the 3 trillion yen profit recorded in the same period the previous year. The erratic financial results of SoftBank, known for its sprawling investment portfolio, have been influenced by market trends, with recent setbacks notably attributed to troubled investments, including office-sharing company WeWork.

WeWork, in which SoftBank holds a nearly 80% stake, filed for Chapter 11 bankruptcy protection amid challenges in the U.S. commercial real estate market. The pandemic-induced surge in vacancies in major cities like New York and San Francisco contributed to WeWork’s difficulties.

SoftBank’s chief financial officer, Yoshimitsu Goto, reassured investors during an online news conference, emphasising the company’s overall strength, prudent investment decisions, and plans for continued growth. Goto acknowledged the regrettable situation with WeWork and pledged to learn from it for future investments, particularly in the Vision Fund.

The financial impact of WeWork on SoftBank for the July-September quarter amounted to 234 billion yen ($1.5 billion). Despite these challenges, Goto highlighted positive developments, such as the recent IPO of British semiconductor and software design company Arm, acquired by SoftBank in 2016. While the IPO did not directly affect earnings, it resulted in a recorded capital surplus gain of $47 billion.

Quarterly sales for SoftBank remained relatively stable, inching up to 1.67 trillion yen ($11 billion) from 1.61 trillion yen. The company did not provide full-year forecasts. SoftBank, once holding significant stakes in major tech companies like Amazon, Facebook, and Alphabet, has divested from them in recent years. The company has also sold its stake in Uber and significantly reduced its stake in Alibaba.

Despite the challenges, SoftBank Group Corp. shares saw a 1.1% rise on the Tokyo Stock Exchange.