SoftBank reports $5.2bn loss in Q3, 4th straight red quarter
What's the story
SoftBank Group has posted a $5.2 billion net loss for the quarter ending September, marking its fourth straight quarter in the red.
The Japanese behemoth's losses are primarily due to the devaluation of tech investments and WeWork's bankruptcy, emphasizing the potential hazards of founder Masayoshi Son's approach of heavily investing in start-ups.
Additionally, SoftBank's financial results highlight the influence of currency fluctuations on even the most tech-centric firms, as a weak yen raised expenses on its dollar-based debt.
Details
Vision Fund investment unit posts profit amid losses
In contrast to SoftBank's overall losses, its Vision Fund investment division reported an investment gain of 21.4 billion yen ($141 million) for the quarter, following a 160 billion yen profit in the prior quarter.
The company's financial performance was also impacted by the sale of a substantial portion of its stake in Chinese e-commerce titan Alibaba last year, resulting in a 3.01 trillion yen profit.
What Next?
WeWork bankruptcy impacts SoftBank's liabilities
WeWork, whose meteoric rise and downfall majorly affected the global office industry, filed for US bankruptcy protection on Monday after its gamble on businesses utilizing more shared office space proved unsuccessful.
SoftBank disclosed that it converted unsecured WeWork notes into shares and convertible bonds, leading to a 21.6 billion yen loss from the transaction in the first half.
The company also noted that its commitment to provide credit support for WeWork increased its liabilities by 57.5 billion yen last quarter.