SoftBank founder Masayoshi Son loses $ 6 million after his strategy of aggressively investing in tech startups, like Uber & WeWork, backfired. The Japanese billionaire’s value slid down to roughly $ 13.8 billion, according to Bloomberg Billionaires Index, after peaking at around $ 20 billion in July, as reported by Bloomberg.
WeWork IPO failure
The Japanese conglomerate’s founder plans to reveal the details of the damage caused on Wednesday. SoftBank’s primary investment vehicle for startups, The Vision Fund, plans to swallow a charge of a minimum of $ 5 billion. One of the reasons for consuming the cost is the significant failure of WeWork’s IPO attempt. The US giant that raised money at a $ 47 billion valuation in January was said to be valued at less than $ 8 billion in the rescue package.
The analysts expect the Japanese firm to post a net loss worth $2.8 billion in comparison to the previous year’s $ 4.6 billion profit approximately. Further, various questions were raised to reaccess the valuation of the poor performer of the marquee investments of the firm like ride-hailing firm Didi Chuxing & Indian hotel startup Oyo Rooms.
The company might book a $ 3.54 billion drop in the value of its Uber stake along with a combined writedown for Wework at around $ 2.82 billion, with a predicted fall in the company’s value from $24 billion to $ 15 billion, but remains uncertain.
According to ET, billionaire’s net worth excludes his $ 8.3 billion value of SoftBank share staked as collateral for his personal loan from 19 banks. Son has also vowed 38% of his stake in the Japanese firm.
Son has even leveraged out his stake in the Vision Fund that is the world’s only largest investment pool for startups. He loaned himself around $ 3 billion to invest in the first Vision Fund, sources close to the matter said.
Amir Anvarzadeh, a market strategist at Asymmetric Advisors Pte in Singapore, said, “Son is desperate enough to potentially announce another big buyback to show his confidence in the business and the Vision Fund.”