SoftBank’s Vision Fund suffers $18 billion loss

The future of SoftBank Group Corporation’s Vision Fund is once again in doubt as the group reported its biggest losses, another year of losses showing that the Japanese company could be in more trouble than imagined.

SoftBank said in its annual financial report that it recorded a total loss of $18 billion as the Coronavirus continues to hamper most of its major investments.

In a statement to its shareholders, Masayoshi Son’s SoftBank Group said it recorded a total loss of about $10 billion from its investments in the world’s largest ride-hailing platform, Uber Technologies and office space provider, WeWork. Another 7 billion losses was attributed to other investments that were not explained.

This period is a very trying period in the history of the Japanese company. Earlier today, Alibaba Group co-founder, Jack Ma, resigned his membership on the board of Japan’s SoftBank Group Corp. His departure is a huge blow to Masayoshi Son, the founder of the Japanese telecom and technology group.

SoftBank said it will propose three new appointments to the board, including group Chief Financial Officer Yoshimoto Goto, at its annual general meeting on June 25. The number of board members will expand to 13.

SoftBank will also propose the election of Lip-Bu Tan, CEO of chip design software firm Cadence Design Systems who is also chairman of venture capital firm Walden International, and Yuko Kawamoto, a professor at Waseda Business School as outside directors. Kawamoto will become its only female board member.

That meets a demand from activist investor Elliott Management, which has pressed SoftBank to improve board diversity and also wants a new subcommittee to oversee the investment process at the $100 billion Vision Fund.

To raise funds in order to cover for the losses, SoftBank has announced that it will collateralize its Alibaba shares to borrow up to $11 billion.

To date, SoftBank has invested in over 88 startups which are majorly bets. While its Japanese telecom company is profitable, virtually all its tech startups have been plunged into debt as the Novel Coronavirus pandemic continues to affect economic and business activities across the world.