'WeWork·Uber Shock' SoftBank Japan's 3Q Net Profit Slashed to One-Tenth Year-on-Year

Sprint-T-Mobile Merger Approval... Stock Price Soars 12% Vertically

[Image source=AP Yonhap News]

[Asia Economy Reporter Cha Min-young] Japan's SoftBank Group recorded poor performance in the third quarter of last year due to the shock from investment losses in shared platform companies WeWork and Uber.

According to foreign media such as CNN Business and ABC News on the 12th (Korean time), SoftBank Group announced that its net profit for the third quarter of 2019 (October to December) was 55 billion yen (about 500 million dollars), down 92% from the same period last year. This is one-tenth of the 698 billion yen recorded in the same period last year.

The decrease in operating profit was largely due to losses from Vision Fund investments. Masayoshi Son, founder and CEO of SoftBank Group, analyzed that the $100 billion Vision Fund was the biggest cause of this failure.

The Vision Fund and related funds recorded an operating loss of $2 billion in this quarter alone. The value of global shared office company WeWork and ride-sharing service company Uber declined, resulting in unavoidable investment losses.

WeWork suddenly announced on September 30 (local time) last year that it would indefinitely postpone its initial public offering (IPO) scheduled for October. Although it continued to see sales growth, it was suffering continuous losses due to reckless management. The ride-sharing service company Uber followed a similar path.

However, since it was right after the US court approved the $26 billion merger plan between Sprint and T-Mobile, the impact on the company's stock price was not significant. Sprint is a company that SoftBank Group invested in about 10 years ago. SoftBank's stock price soared vertically as soon as the merger approval news came out, closing the session up 12% on the Tokyo Stock Exchange.

This content was produced with the assistance of AI translation services.