Infographic: Softbank Regrets WeWork Purchase After Posting Biggest Quarterly Loss (2024)

FAQs

How much has SoftBank lost on WeWork? ›

The SoftBank Vision Fund lost a total of just over $14 billion on its WeWork bet.

SoftBank took a ¥183 billion hit from the weaker yen, largely because of its US dollar-denominated liabilities. Analysts on average had estimated a group net income of ¥203.4 billion. SoftBank is trying to regain its footing after its Vision Fund unit lost $53 billion in the last two years on startup missteps.

The Japanese company stepped in with a $9.5 billion bailout in 2019, following WeWork's failed attempt to go public and spiraling losses. Appeared in the November 10, 2023, print edition as 'SoftBank Posts $6.2 Billion Loss'.

SoftBank has lost more than $14 billion by betting on WeWork

Tech conglomerate and investor SoftBank has lost $14.4 billion so far on WeWork.

A few days earlier, SoftBank Group bought back the 25% stake from Vision Fund for around $16 billion, valuing Arm at over $64 billion. Arm went public on 14 September 2023 raising $4.87 billion at a $54.5 billion valuation, with SoftBank continuing to own roughly 90% of the company following the offering.

racked up a huge loss in the July-September quarter as its technology investments, most notably office-sharing company WeWork, went sour. Tokyo-based SoftBank loss totaled 931 billion yen ($6.2 billion) in the last quarter, a reversal from the 3 trillion yen profit it posted in the same period a year earlier.

SoftBank's flagship tech investment arm had a rough time in the fiscal year that ended in March this year, posting a record loss of around $32 billion. A slump in tech stock prices and the souring of some of SoftBank's bets in China were to blame.

WeWork never came out of the crisis, the depth of which was revealed in the IPO. The company cut back, streamlined, reduced interest on loans, reorganized debt and also successfully negotiated hundreds of lease agreements, but all this did not help. Except for once early on, WeWork failed to post a net profit.

In its March 2022 annual report, SoftBank said it had lost $8.7 billion on WeWork stock. It reported further losses, equivalent to about $5 billion, on both equity and debt between then and June 30 of this year.

Neumann sued SoftBank, and ultimately an agreement was made where he would receive an estimated $700 million in payouts. He received a one-time $106 million cash settlement and was allowed to sell $578 million worth of his shares to the bank. He was also paid a $185 million non-compete fee.

What percentage of WeWork does SoftBank own? ›

SoftBank owns around 71% of WeWork, which it privately valued at $47 billion at its peak but is now valued at just $44 million.

WeWork founder Adam Neumann is still worth $1.7 billion even after the company's stunning bankruptcy | Fortune.

But a strategy that put expansion ahead of profits, along with the erratic behaviour of its founders eventually sunk an initial public offering. Joanna Strange was a WeWork employee and the first whistleblower to speak out about the company's finances.

As of September, WeWork's largest U.S. landlords included Beacon Capital Partners; the William Kaufman Organization and Travelers; Boston Properties; the Chetrit Group and Moinian Group; and Walter & Samuels, according to CoStar data.

WeWork's bankruptcy filing caps a yearslong saga that revealed breathtaking flaws in the investment style of Japanese billionaire Masayoshi Son, damaging his professional reputation far beyond the money he lost.

SoftBank owns around 71% of WeWork, which it privately valued at $47 billion at its peak but is now valued at just $44 million. It is not immediately clear how SoftBank's stake might change after the debt-for-equity deal.