Softbank founder Masayoshi Son has called the Japanese company’s disappointing results “a mess” and admitted a “problem” with his judgement, after the tech investment giant swung to an operating loss for the first time in 14 years.
The group reported a $6.4bn quarterly loss this morning, driven by soured bets on tech prospects including Wework and Uber by its $100bn Vision Fund. The fund posted a $8.9bn loss for the quarter.
“Today’s earnings are a mess,” said Son, according to a Bloomberg translation. “It’s red all over.”
Softbank recently ploughed another $10bn into a rescue package for struggling office space firm Wework following an aborted listing.
The Japenese investment giant and its fund had already invested $10bn in Wework before the bailout.
Speaking after the results, Son said: “There was a problem with my own judgment, that’s something I have to reflect on”.
Son said he had put too much faith in Wework co-founder Adam Neumann, and said there would be no more rescue packages for startups in Softbank’s portfolio.
But the billionaire moved to defend his investment approach, and added: “There is no change in our journey, no change in our vision.”
Son is currently fundraising for Softbank’s second Vision Fund, which he said was on track to close soon.
Vision Fund 2 had initially been expected to surpass its predecessor in size, but it is now thought it will be roughly the same, as investors are spooked by volatile market conditions and the poor performance of some of the first fund’s bets.
The first Vision Fund was the largest amount of private money ever raised.
The value of Softbank’s investment in Wework plunged $3.2bn between July and September, the results showed.
Most of the Vision Fund’s listed holdings fell in value during the quarter, including stakes in Slack and Uber, which sank to a fresh low earlier this week.
Cityindex analyst Ken Odeluga said that while the high profile struggles of Wework and Uber meant Softbank’s results were not surprising, there was “no way to downplay the magnitude” of the loss.
Odeluga said the results reflected Son’s “determination to pursue giant potential fast-growing opportunities, almost at any cost”.
Despite acknowledging issues with his own judgement, Son remained defiant about his overall investment strategy.
“I learned a harsh lesson and I should have known better,” said Son.
“But I don’t regret it too much. I won’t be too nervous about future investments. I am staying confident.”
Main image credit: Getty