This Is What a Cash Flow Problem Looks Like
Bloomberg Businessweek US|September 26, 2022
Private equity firms are supposedly masters of the business universe, spotting the hottest trends and giving survival tips to their portfolio companies during economic downturns. But do they know how to manage their own cash flows? Investors are taking a hard look at some of the industry’s biggest names.
Shuli Ren
This Is What a Cash Flow Problem Looks Like

Take SoftBank, which is using “prepaid forward contracts” to monetize some of its prized Alibaba shares. In August, the tech investor said it decided on an “early physical settlement,” which cut exposure to its most valuable asset by almost half, when the shares were roughly 70% below peak.

One possible explanation for the transaction may be that SoftBank is at risk of breaching a covenant with its lenders, which states that it must not report two consecutive years of losses. SoftBank lost $15.5 billion in its fiscal year ended March 2022, only to take a $23 billion blow a quarter later.

Denne historien er fra September 26, 2022-utgaven av Bloomberg Businessweek US.

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