SoftBank chief executive officer Masayoshi Son is putting all of his hopes on a select number startups which he calls ‘winged unicorns.’
SoftBank managers a Vision Fund with a total capital of $100 billion. The investment firm is known as one of the most successful in the business. However, a string of failed startups has brought optimism down to a record low.
Virus affecting tech
In a recent earnings presentation, Mr. Son says that many tech startups are also bearing the brunt of the current coronavirus pandemic. On the same presentation, he confirms the record annual loss for a conglomerate. Moreover, he adds that the firm suffers from an $18 billion shortfall
Nevertheless, Mr. Son is positive that his conglomerate can weather the storm. He adds that he has a select number of startups that he is pinning his hopes. These startups, according to Mr. Son, have the potential to account for at least 90% of the conglomerate’s entire portfolio.
The SoftBank Vision Fund currently has 88 companies on its portfolio. Mr. Son offers a glimpse of which of these companies he envisions will one day save the conglomerate.
CEO Masayoshi Son tells investors unhappy about #Softbank's stunning $13 billion annual loss, including an $18 billion loss at Vision Fund, that Jesus was also misunderstood and criticized.
— Vicki Bryan’s Bond Angle (@VickiBryanBondA) May 18, 2020
Mr. Son said that the current coronavirus pandemic has created a surge in the online medical, food delivery, online shopping, and video streaming services. Nevertheless, he digresses that the pandemic has been a total disaster for the tech industry, and the conglomerate in general.
Market analysts claim that Mr. Son hopes that a few of his companies can make up for the loss of others. His companies like Ping An Healthcare and Technology seeing quite a surge recently.
The future of the fund
SoftBank is experiencing quite a stormy sea recently. Prominent business icon Jack Ma recently confirms his exit from the board. Moreover, Mr. Son is also receiving a lot of friction from Elliot Management forcing him to sell his Alibaba stocks.
Because of this poor performance, SoftBank is not able to secure much-needed funding. One of the fund’s biggest back, the Saudi Arabia sovereign wealth fund, is getting skeptical of the fund’s investments.
Many market analysts agree that SoftBank’s downfall started with the mismanagement of WeWork. The startup is now a cautionary tale for many in the investment industry. Nevertheless, Mr. Son is still optimistic about WeWork and even claims the startup is now in recovery.
With the world still struggling to cope with the coronavirus pandemic, SoftBank is also working to keep its heads up. Whatever the future has in store for the company, only time will tell.
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