Masayoshi Son founded Softbank in 1981 and currently serves as its board chair and chief executive officer. He has wiped out billions of dollars of the company’s market cap as he made risky bets on both public and private technology companies. His Vision Fund, which had $100 billion to invest, is reeling from losses.
The Vision Fund lost $21.7 billion last quarter, a sum it will never regain. Almost all the companies it owns are private, so determining the loss by company is impossible. Some of these investments probably need to be shuttered. Others may need more capital, and the Vision Fund’s management says its investment posture has become “defensive.” This means several companies may not have access to capital, even if they have promising futures.
Softbank does have some companies that have financials available to the public. The value of the large Vision Fund investments in Uber and DoorDash were pounded.
Softbank’s share price has collapsed over the past year. It is down by 32%.
Son also has made questionable decisions about who should be on the board. Morrison & Foerster partner Ken Siegel has represented Softbank as an attorney. Proxy solicitation firm Glass Lewis objected to his appointment: “We question the need for the company to engage in legal services with its directors. We view such relationships as creating conflicts for directors.” Softbank needs better governance and oversight of management, and not directors with conflicts of interest.
There is a chance that Softbank will post another poor set of earnings for the third quarter. The company needs to restructure with a complete review of its investments and a public disclosure of those it intends to support. Son is the last person who should handle that transition.
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