Japanese multinational conglomerate SoftBank Group posted a record-breaking $18 billion operating loss right after Alibaba co-founder Jack Ma announced he was stepping down from the board, according to a company announcement on Monday morning (May 18).
In the fiscal year ending March 31, SoftBank posted an annual operating loss of $12.7 billion, its first annual loss in 15 years. It had forecasted that its $100 billion Vision Fund would lose $16.5 billion. During the same period in 2019, SoftBank had a profit of $19.6 billion, The New York Times said in a report.
Ma’s resignation will be effective on June 25, when new appointments will be made at the 40th annual general meeting of shareholders. A vote will take place for the proposed election of Yoshimitsu Goto, Lip-Bu Tan and Yuko Kawamoto as new board directors.
SoftBank’s record losses stemmed from its Vision Fund, which lost $10 billion on investments in WeWork and Uber. The fund invested $75 billion investment in 88 startups, which were valued at $69.6 billion at the end of March, according to a New York Times report on Monday (May 18).
The conglomerate blamed the economic fallout triggered by the coronavirus pandemic for its $7.5 billion in losses on other tech investments. SoftBank also lost its investment in satellite operator OneWeb, which filed for bankruptcy in late March.
In April, SoftBank indicated that it was planning to sell down $41 billion in assets, which could include part of its Alibaba holdings, according to the NYT report. SoftBank is also looking to buy back $23 billion of its own shares.
SoftBank also announced on Monday (May 18) that it was planning to spend $4.7 billion to buy back the shares by the end of March 2021.
We Work’s former CEO Adam Neumann has filed a lawsuit against SoftBank for backing out of a promised $3 billion investment.