The company, part mobile phone operator and part investment maven, put together a roughly $100 billion vehicle with the Vision Fund, largely fueled by foreign dollars and fit with a complicated makeup.
Awkward for SoftBank and its funded vision of taking huge stakes in some of the world’s most famous companies, it’s precisely those bets that have proved troublesome.
Vision Fund money helped turn WeWork into the mess detailed in its S-1, only to, now, take a writedown on the cumulative investment.
SoftBank, apart from the Vision Fund and its smaller companion fund (the Delta Fund), made money, including operating income of 265.9 billion Yen in Q2, and 557.1 billion Yen in H1 as a whole.
Inclusive of the Vision Fund and Delta Fund’s results, the company’s Q2 operating income came to -704.4 billion Yen after a 970.03 billion Yen operating loss from the Vision and Delta Funds.
More clearly, SoftBank states that following “WeWork’s business plan was revised significantly” the company “fair value of WeWork’s entire equity decreased to $7.8 billion as of the second quarter-end, and consequently the changes in the fair value of investments held by the Company’s wholly owned subsidiary and SoftBank Vision Fund were recorded as a loss in the second quarter.”
In dollars, SoftBank lost $6.5 billion in the quarter, including a $4.6 billion charge relating to the value of WeWork, according to Bloomberg who executed the currency conversions.