SoftBank likely to post fall in quarterly profits due to poor bets
TOKYO: Japan's SoftBank Group is expected to post a slide in profits for the past quarter, deepening concern about its ability to secure funding for a second Vision Fund and giving activist fund Elliott Management more fodder for a shake-up.
Elliott, the New York-based fund founded by billionaire Paul Singer, has amassed a stake of almost US$3 billion (S$4.2 billion) in SoftBank and is pushing for changes including US$20 billion in stock buybacks, sources said last week.
The emergence of Elliott as a prominent SoftBank shareholder is likely to highlight the company's difficulties following its soured bet on office-sharing start-up WeWork.
SoftBank, which reported its first quarterly loss in 14 years in July-September, has come under pressure for its lack of transparency, especially around its US$100 billion Vision Fund of mainly unlisted start-ups.
SoftBank is expected to post a 20 per cent fall in operating profit to 345 billion yen (S$4.4 billion) in the October-December quarter, according to the average forecast of analyst estimates compiled by Refinitiv.
That would follow a quarterly operating loss of 704 billion yen when it was whiplashed by an US$8.9 billion hit at the Vision Fund as the value of WeWork and other bets like Uber plunged.
The loss prompted founder Masayoshi Son to acknowledge his "investment judgment was poor in many ways". - REUTERS