Struggling Japanese conglomerate SoftBank Group on Monday reported an $8.9 billion annual net loss, as the coronavirus pandemic compounded woes caused by its investment in troubled startup WeWork.
The telecoms and investment giant had previously forecast a net loss of $8.4 billion for the year that ended in March, warning it was being hit by the “deteriorating market environment.”
In a press release, the Japanese firm said its investment businesses - particularly its huge SoftBank Vision Fund - had been “adversely affected” by the global health crisis.
It reported an operating loss of 1.36 trillion yen ($12.6 billion) and warned that “if the pandemic continues, the company expects that uncertainty in its investment businesses will remain over the next fiscal year.”
The results are the latest blow for the firm’s flamboyant chief Masayoshi Son, who has transformed what began as a telecoms company into an investment and tech behemoth with stakes in some of Silicon Valley’s hottest startups through its $100-billion Vision Fund.
Son has faced an increasing drumbeat of criticism over his determination to pour money into startups that some analysts say are overvalued and lack clear profit models.
His biggest headache has come from office-sharing startup WeWork, which has fallen from favor after initially being hailed as a dazzling unicorn.
SoftBank Group and Son’s Vision Fund have plowed money into the startup, but recently withdrew a plan to buy up to $3 billion WeWork shares.
WeWork is now suing SoftBank over the move, alleging breach of contract.