The Case For SoftBank Writing Down WeWork

Masayoshi Son must decide whether to write down SoftBank’s 29% stake in the startup

- Shuli Ren

We’ll soon find out if SoftBank founder Masayoshi Son is a tech visionary or a genius in financial engineering. He started the $100 billion Vision Fund barely three years ago, and SoftBank is already making good money from asset management. In the fiscal year ended in March, more than half of SoftBank Group Corp.’s operating income came from unrealized valuation gains of investments it made via the Vision Fund, eclipsing earnings from core operations such as its domestic telecommunications.

But now SoftBank has a problem: WeWork. The initial public offering of its parent company, We Co., is being delayed, and when it does occur, the stock market may value the company at as little as $15 billion, about one-third of the $47 billion valuation it had when Son last put money into the company. As the September quarter draws to a close, SoftBank will need to decide whether to write down the value of its 29% stake in WeWork. A representative for SoftBank declined to comment.