SoftBank books a $5.2 bln quarterly loss as investments and a weak yen bite. The once-flying WeWork filed for bankruptcy, while SoftBank Group (9984.T) suffered a $5.2 billion quarterly loss on Thursday, marking its fourth consecutive quarter of losses. The Japanese tech giant also wrote down the value of its digital investments.
The outcomes highlight the erratic and hazardous nature of the founder’s approach to placing large bets on frequently dangerous start-ups. The loss served as a reminder that commonplace issues like exchange rates can affect even companies like SoftBank, which is well-known for emphasizing cutting-edge technology.
The Japanese company said that rising interest rates on its debt denominated in dollars put pressure on it due to the yen’s depreciation.
When it sold off a sizable piece of its share in Chinese e-commerce giant Alibaba (9988. HK), SoftBank claimed a 3.01 trillion yen profit a year earlier. SoftBank reported a 789 billion yen ($5.2 billion) net loss for the three months ending at the end of September.
After reporting a profit of 160 billion yen three months prior, its investment business, the Vision Fund, recorded an investment profit of 21.4 billion yen in the most recent quarter.
The depressing results were released concurrently with the group’s successful completion of Arm’s much-awaited initial public offering (IPO). However, as Arm is still a subsidiary, the IPO’s profits were not included in earnings.
WeWork filed for bankruptcy protection in the United States Monday after its bets on businesses utilizing more of its office-sharing space went terrible. WeWork’s quick ascent and fall changed the office industry internationally.
SoftBank reported a 21.6 billion yen loss on exchanging unsecured WeWork notes for shares and convertible bonds in the year’s first half.
Despite having written down billions of dollars worth of WeWork investments over the years, SoftBank said on Thursday that the investment firm’s liabilities climbed by 57.5 billion yen due to its promise to support WeWork’s credit.
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