SoftBank Group Corp. forecast a record ¥1.35 trillion ($12.5 billion) operating loss for the fiscal year ended in March, a sign of how badly Masayoshi Son's bets on technology startups have been battered in recent months.
The Japanese company expects to record a ¥1.8 trillion loss from its Vision Fund and another ¥800 billion in losses from SoftBank's own investments. It has written down the value of investments in companies, including office-rental startup WeWork and satellite operator OneWeb, which filed for bankruptcy last month. SoftBank's shares fell Tuesday as much as 4.2% to ¥4,025 in Tokyo.
Mr. Son's conglomerate has taken one blow after another since the implosion of WeWork's initial public offering last year and SoftBank's subsequent bailout. It bet heavily on sharing-economy startups, which allow people to split the use of offices or cars, but those investments have been particularly hard hit as the coronavirus pandemic curbs unnecessary human interaction.
"This is looking more and more like the perfect storm for SoftBank," said Justin Tang, head of Asian Research at United First Partners. "The question is whether there is more to come."
The Vision Fund probably wrote down about ¥1 trillion in assets in the March quarter, based on its earlier earnings reports. SoftBank didn't detail all the startups that took hits.
Investors have become increasingly spooked about the stability of Mr. Son's empire and its $100 billion Vision Fund amid the virus outbreak. Shares tumbled at one point more than 50% from their peak this year, and SoftBank's credit default swaps — the cost of insuring debt against default — spiked to their highest levels in about decade.
Mr. Son has also drawn unusual pressure from some investors. The U.S. activist investor Elliott Management Corp. took a substantial stake in the company, advocating for changes in governance and investing practices.
The billionaire responded with a strategy to part with some of his precious holdings, unloading about $41 billion in assets to buy back shares and pay off debts. SoftBank plans to sell about $14 billion of shares in Chinese e-commerce leader Alibaba Group Holding Ltd. as part of an effort.
"This will only make asset sales even more urgent for SoftBank," said Koji Hirai, the head of M&A at advisory firm Kachitas Corp. in Tokyo.
It's a dramatic turnaround for the 62-year-old Mr. Son. Just two months ago, he declared on stage in Tokyo that SoftBank's fortunes were turning around after the WeWork meltdown.
"After a difficult winter always comes spring," he said at the time.
Mr. Son highlighted a big surge in the shares of Uber Technologies Inc., one of SoftBank's bigger holdings, explaining that his company would likely be able to book a profit on the stake. He also declared WeWork poised for a comeback.
But the coronavirus outbreak wreaked havoc on those plans. With fear of contagion, people stopped sharing offices from Beijing to New York. Ride-hailing companies — SoftBank has stakes in four of the biggest worldwide — saw business evaporate. Uber CEO Dara Khosrowshahi publicly declared "I wouldn't put my kids in an Uber."
Another sign of the troubles is Oyo, a hotel-booking service into which SoftBank invested about $1.5 billion. Its business model has been slammed as global travel screeched to a halt. This month, Ritesh Agarwal, founder and CEO, said the company would furlough employees in countries outside India as it struggles to survive the virus.