Softbank Group reports half-yearly operating loss

Adam Neumann speaks onstage at a We Work event at the Microsoft Theater in Los Angeles

"Our financial results this time are totally shattered", Son told a news conference in Tokyo after the figures were released.

SoftBank marked down the total value of WeWork's equity to $7.8 billion, a long way from the startup's $47 billion valuation before its attempt to go public backfired amid widespread skepticism about its profitability and management.

SoftBank lost at least $4.7 billion by investing in WeWork after the shared-workspace group's initial public offering collapsed and its $47 billion valuation from January plunged to below $10 billion.

But the investment giant's other investments have failed to deliver the returns needed to keep it profitable, with some such as WeWork needing further bailouts instead.

The firm said first-half operating losses from its Vision Fund and Delta Fund came to 572.6 billion yen, largely "due to a decrease in the fair values of investments including Uber and WeWork and its three affiliates".

SoftBank's first quarterly loss in 14 years comes after a awful quarter for the tech companies backed by Son's venture capital funds, the $100bn (£77bn) Vision Fund and the smaller Delta Fund.

The operating loss of ¥704.4 billion in the three months ended September 30 easily surpassed the ¥230.8 billion average of analysts' projections, and compared with a ¥705.7 billion profit a year earlier.

WeWork's parent, the We Company, was forced to abandon an initial public offering of its shares on USA stock markets at the end of September after investors queried the huge valuation given to the office space rental company. Analysts had predicted a charge to be in excess of $5 billion and as much as $7 billion.

After Neumann left WeWork as part of an agreed $9.5bn rescue package by Softbank, Marcelo Claure, a senior SoftBank executive, was appointed to lead the troubled company.

Mr. Son said WeWork was on the road to recovery by cutting costs and eliminating unprofitable units. Those locations are in various stages of renovation but WeWork would consider relinquishing them if it finds companies willing to take over, that person said.

"We are fully committed to improving the business and ensuring our long-term viability to the benefit of our landlords, members, and employees", the spokesperson said.



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