Finally the Japanese funding and investment giant SoftBank Group committed that it suffered an operating loss of $6.4 billion in the second quarter, the worst in its history, as it took a hit from investments in start-ups including WeWork and Uber.
The eye-watering results follow a turbulent period for the firm and led CEO Masayoshi Son to admit regret over errors as he faces criticism over his commitment to startups some say are overvalued and lack clear profit models.
In the three-month period ending September 30, operating losses hit a whopping 704.4 billion yen ($6.4 billion), worse than many analysts had expected.
“My investment decisions were in many ways poor. I regret them deeply.”
But he defended his overall strategy, including continuing to plough funds into troubled office-sharing startup WeWork, and insisted shareholder value continues to increase.
The firm said first-half operating losses from its Vision Fund and Delta Fund came to 572.6 billion yen, largely “due to a decrease in the fair values of investments including Uber and WeWork and its three affiliates”.
Overall, net profit in April-September sank 49.8 percent to 421.6 billion yen on an operating loss of 15.6 billion yen.
But some analysts said the results were “not so desperately bad”.
“How you react to these three-month figures would depend on your investment style, whether you trade over short periods of time or invest for the longer term,” Seiichi Suzuki, senior market analyst at Tokai Tokyo Research Institute, told AFP.
“It’s difficult to make a quick verdict on its business model,” he added.
The company did not publish its outlook for the year to March 2020, but uncertain roads lie ahead as shares in its key investments such as Uber and Slack continue to slide.
Last month, SoftBank confirmed that it was injecting billions of dollars into WeWork, once hailed as a shining unicorn valued at $47 billion at the start of the year.
The startup has gone from an investor darling to cancelling its IPO and seeing its co-founder Adam Neumann pushed out, albeit with a reported package of more than $1.5 billion.
Son insisted the firm was not a “sinking ship”, but acknowledged he had “learned a lot” from the turmoil.