In an announcement on April 13, SoftBank cited a “deteriorating market environment” as the explanation for the abysmal results at its $100 billion Vision Fund.
SoftBank, founded by veteran tech investor Masayoshi Son, has warned that full-year losses could reach $13 billion, with the company’s flagship Vision Fund weighed down by a deficit of approximately $16.7 billion.
The loss, the largest in the company’s history, heaps pressure on Son to push ahead with asset disposals after a series of disastrous bets that included wayward investments in WeWork and OneWeb, which filed for Chapter 11 bankruptcy in March.
In an announcement on April 13, SoftBank cited a “deteriorating market environment” as the explanation for the abysmal results at its $100 billion Vision Fund. But analysts say the market has woken up to the fact many of the fund’s investments are not tech plays.
“SoftBank thought it was investing in technology businesses. In reality, it was investing in office sharing, hotels and the taxi industry,” says John Colley, associate dean of Warwick Business School in the UK. “The difference is enormous.”
The industries Softbank invests in are often low-margin and highly competitive due to low barriers to entry, which makes them particularly exposed to economic shocks, Colley adds.
