SoftBank CEO Masayoshi Son calls his company’s decision to save WeWork “an exception” that won’t happen again.
Last month, SoftBank extended a lifeline of $8 billion into WeWork, committing $5 billion in new financing as well as issuing a tender offer for an additional $3 billion in buybacks for shareholders, while the firm would also speed up a commitment to put $1.5 billion into the company. As a result, SoftBank reported a $6.5 billion loss on Wednesday (Nov. 6), its first quarterly drop-off in 14 years and larger than analysts’ estimates.
Although he wouldn’t go as far as calling the WeWork move a rescue, Son told investors that SoftBank will make “no investment for the purpose of rescue,” according to CNBC. He said portfolio companies must be “self-financing,” and “that’s something that I would like to clearly extend my message to you.”
WeWork was forced to cancel its plans for its IPO in September after it divulged extensive losses, its founder and CEO Adam Neumann stepped down and changes to the firm’s corporate framework were announced.
Son admitted that the result has been many questioning his decision making, as well as the future of SoftBank’s Vision Fund, which has spent about $80 billion in less than three years. As far as other investments failing, Son said that is always a possibility.
“Is there any other similar concern? In fact, yes, there is,” Son said. “Like a dog-walking company and other portfolio companies, we may see similar problems surfacing.”
SoftBank has invested $300 million in dog-walking company Wag, which is now looking into a sale. And it also took a loss on its investment in Uber, which has seen its stock fall 40 percent since its May IPO.
Son did point to one of the fund’s successes: its investment in Slack.
“Actually they have increased about five times compared to our invested amount,” Son said, adding that his company is also doing well with investments in Guardant Health and 10x Genomics.