• 21 hours El Salvador’s Surprise Bitcoin Move
  • 4 days Markets Unfazed As Inflation Hits 13-Year High
  • 5 days How the Token Economy is Disrupting Financial Markets
  • 7 days FBI Investigating 100 Types Of Ransomware Attacks
  • 9 days Fed Ends Corporate Credit Emergency Lending Program
  • 11 days AMC Becomes the Latest Winning Meme Stock After GameStop
  • 12 days The Real Reason Your 401k Has Been Lagging
  • 13 days China Lifts Cap On Births, Allows Three Children Per Couple
  • 15 days The Market Is Ripe For Another GameStop Saga
  • 18 days Senate Grills Big Banks Over Pandemic Opportunism
  • 19 days Cannabis Has A Major Cash Problem
  • 20 days Ransomware Netted Criminals $350M In 2020 Alone
  • 21 days Russia Is Taking On Google
  • 22 days Chinese Regulators Deal Another Big Blow To Bitcoin
  • 23 days Ohio Residents Brave Vaccine for Chance To Win $1M
  • 25 days Inflation Is Coming. Are You Prepared?
  • 26 days Travel Might Get Another Supersonic Disruption
  • 27 days The World Is Running Out Of 6 Key Resources
  • 28 days $15/Hour Minimum Wage Might Happen Naturally
  • 30 days Money-Laundering Binance Probe Report Adds To Bitcoin Woes
5 Things To Do With $1,000 Right Now

5 Things To Do With $1,000 Right Now

If you’ve got an extra…

What Does Tesla's Million-Mile Battery Mean For Green Energy?

What Does Tesla's Million-Mile Battery Mean For Green Energy?

Tesla’s million-mile electric vehicle battery…

  1. Home
  2. Investing
  3. Other

SoftBank Reeling After Questionable WeWork Investment

SoftBank

SoftBank Group CEO Masayoshi Son says he is "embarrassed and flustered" by his track record after the valuations of WeWork and Uber plunge, in an interview with Nikkei Business magazine on Monday morning. 

"The results still have a long way to go and that makes me embarrassed and impatient," said Son. "I used to envy the scale of the markets in the U.S. and China, but now you see red-hot growth companies coming out of small markets like in Southeast Asia. There is just no excuse for entrepreneurs in Japan, myself included." A lot of Son's embarrassment is centered around his $100 billion Vision Fund where he ignored valuation metrics of WeWork and Uber, and invested into these technology unicorns at ultra-high valuations, only to find out, that in 2019, he overpaid for those investments. 

We recently said, as the proverbial tide goes out, Son has been caught swimming naked. 

SoftBank/Vision Fund plowed nearly $10 billion into WeWork, investing some of that capital at a $47 billion valuation in 1Q19.

But since WeWork's IPO was shelved, the startup is now only worth $10-12 billion.

Uber is another failure for Son's Vision Fund, since the initial listing, the company has lost almost 37% of market capitalization. 

It's apparent that Son's aggressive risk-taking in technology companies left him overlooking valuation metrics in the last several years. 

Related: Is China's Mining Dominance Coming To An End?

Another terrible judgment call on Son's part was the announcement of a $5.5 billion share buyback program of SoftBank Group's shares, earlier this year. The billionaire investor decided to buyback company stock because valuations of WeWork and other investments saw significant valuation increases. 

And last Friday, we said Son is having tremendous difficulty attracting investors to Vision Fund 2 amid new developments that Vision Fund could see significant writedowns in the quarters ahead after WeWork and Uber valuation implosions.

If macroeconomic headwinds continue to mount in the global economy, technology unicorn valuations will reset further. 

As we've highlighted in the last several weeks, the global IPO and M&A markets are starting to falter -- this will further stress Vision Fund as their ability to cash out of technology unicorns are coming to an end for the year. 

We even reported last week that veteran venture capitalists called an emergency meeting of the technology unicorns in Silicon Valley to advise them on the turbulent times ahead.  

And of course, Son is "embarrassed," who wouldn't be, when you're caught swimming naked as the tide goes out. 

By Zerohedge.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment