SoftBank Suffers From Wework's Bankruptcy and Yen Weakness
Arm IPO offers hope

SoftBank, the giant among tech investors, reports a billion-dollar loss midway through the current fiscal year. The insolvency of Wework and the general crisis in the tech sector are taking a toll on the company. However, despite these setbacks and the challenges posed by the weak yen, the successful IPO of chip designer Arm opens up new strategic possibilities for the company.
The loss of 907 billion yen is a heavy blow to SoftBank, which had aimed to return to profitability after two years of losses. The losses are partially attributed to the negative interest rate policy of the Japanese central bank and the resulting currency losses. Despite the yen's depreciation against the dollar, which has increased the yen-denominated debt, the focus is on the future.
Despite the difficulties, SoftBank remains optimistic. The successful IPO of Arm, which raised $5.1 billion for the sale of only ten percent of the shares, demonstrates that investments in future technologies can indeed pay off. Arm, originally acquired by SoftBank for 30 billion euros, now has a market value of 55 billion euros and strengthens the company's balance sheet.
SoftBank's strategy of investing in mega-startups like Wework and Arm is risky but potentially very rewarding. Masahiro Son, SoftBank's founder, is known for his risky bets, which can sometimes pay off spectacularly but also fail dramatically. Now, with the success of Arm, Son may be able to renew his investment strategy and focus on AI startups.
OpenAI, the company behind the AI application ChatGPT, could be a target for Son, who is known for financing ambitious visions. SoftBank's successes and failures reflect the volatile nature of the tech industry and the venture capital market. While the short-term losses are painful, the long-term focus on leading technologies could put the company back on a path to success.
The overall situation remains tense for the full year. After a loss of around 6.6 billion euros in 2022, the company faces the challenge of turning things around and returning to profitability.
