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SoftBank reports first losses in 14 years
14-11-2019 16:17
SoftBank reports first losses in 14 years
SoftBank reports first losses in 14 years

SoftBank Group Corp., a Japanese holding company, has long been showing great results in terms of quarterly earnings. However, any economic success may change over time, and the recent situation with SoftBank confirms this statement. Operating losses of the financial company reached an impressive $6.5 billion in July-September quarter this year. Analysts say that the company has incurred quarterly losses for the first time in 14 years.The losses are attributed to an unsuccessful investment in co-working startup WeWork and Uber taxi service. Moreover, the Vision Fund, a subsidiary of SoftBank, has also contributed to the overall share of company’s operating losses with $8.9 billion lost revenue. According to SoftBank analysts, the total value of portfolios in which the fund invested makes up $77.6 billion. This is 9.8% more than at the first stage of investment. Besides, SoftBank reported that it failed to receive the $4.9 billion which the company had expected to make from some investment projects such as WeWork and Uber. Last month, SoftBank agreed to take a controlling stake in WeWork. Notably, in January this year, the co-working company was valued at $47 billion, however, currently, the company’s value has dropped to just $8 billion. Uber has also experienced financial difficulties reporting a heavy quarterly loss of $1.16 billion on November 4. It is said to be the third worst quarterly result of Uber over the past two years. SoftBank's weak financial results are mainly associated with the bank’s enormous expenses. This casts doubt on the company’s management efficiency. SoftBank's founder, Masayoshi Son, accepted that he had made a poor investment decision. In addition, many startups that previously received money from the Vision Fund encountered serious financial problems.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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