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| SoftBank’s Troubles Deepen With Warning of $16.7 Billion Writedown | SoftBank’s Troubles Deepen With Warning of $16.7 Billion Writedown |
| (6 days later) | |
| TOKYO — SoftBank warned investors on Monday that the value of its technology fund may have dropped by as much as $16.7 billion over the last fiscal year, as its investments have been hit hard by the fallout from the coronavirus and by big bets on unprofitable companies like WeWork. | TOKYO — SoftBank warned investors on Monday that the value of its technology fund may have dropped by as much as $16.7 billion over the last fiscal year, as its investments have been hit hard by the fallout from the coronavirus and by big bets on unprofitable companies like WeWork. |
| SoftBank, which had deployed a $100 billion Vision Fund to make huge wagers on young companies like WeWork and Uber over the last few years, said in a statement posted to its website that the fund would record a loss of 1.8 trillion yen for the fiscal year that ended in March “due to the deteriorating market environment.” | SoftBank, which had deployed a $100 billion Vision Fund to make huge wagers on young companies like WeWork and Uber over the last few years, said in a statement posted to its website that the fund would record a loss of 1.8 trillion yen for the fiscal year that ended in March “due to the deteriorating market environment.” |
| While the loss will be partially offset by revenue from SoftBank’s other businesses, the company said it expected to end the year with a ¥1.35 trillion loss, its first annual loss in 15 years. | While the loss will be partially offset by revenue from SoftBank’s other businesses, the company said it expected to end the year with a ¥1.35 trillion loss, its first annual loss in 15 years. |
| The disclosure marked another stumble for SoftBank, which upended the start-up investment world when it began the Vision Fund in 2017 but has lately been struggling. The fund was the largest pool of money ever raised for private technology companies, with backing from sovereign wealth funds in Saudi Arabia and Abu Dhabi, as well as Apple and Foxconn. | The disclosure marked another stumble for SoftBank, which upended the start-up investment world when it began the Vision Fund in 2017 but has lately been struggling. The fund was the largest pool of money ever raised for private technology companies, with backing from sovereign wealth funds in Saudi Arabia and Abu Dhabi, as well as Apple and Foxconn. |
| Through it, SoftBank bet big on start-ups around the world, including Uber, a ride-hailing giant; WeWork, a co-working start-up; Oyo, a hospitality company in India; Coupang, an e-commerce company in South Korea; and Rappi, a delivery company in Latin America. Its aggressive deal-making pushed Silicon Valley investment firms to move faster and raise larger funds to keep up. | Through it, SoftBank bet big on start-ups around the world, including Uber, a ride-hailing giant; WeWork, a co-working start-up; Oyo, a hospitality company in India; Coupang, an e-commerce company in South Korea; and Rappi, a delivery company in Latin America. Its aggressive deal-making pushed Silicon Valley investment firms to move faster and raise larger funds to keep up. |
| But cracks began showing last year when Uber went public at a much lower valuation than expected. In October, WeWork yanked its highly anticipated initial public offering over allegations of mismanagement, and SoftBank pledged almost $10 billion to bail out the company. Both Uber and WeWork grew quickly but are unprofitable. | But cracks began showing last year when Uber went public at a much lower valuation than expected. In October, WeWork yanked its highly anticipated initial public offering over allegations of mismanagement, and SoftBank pledged almost $10 billion to bail out the company. Both Uber and WeWork grew quickly but are unprofitable. |
| In November, Masayoshi Son, SoftBank’s founder and chief executive, said the Vision Fund would not offer bailouts to any more of its investments. Soon after, start-ups around the world shifted their strategies from growing fast to cutting costs and trying to turn a profit. | In November, Masayoshi Son, SoftBank’s founder and chief executive, said the Vision Fund would not offer bailouts to any more of its investments. Soon after, start-ups around the world shifted their strategies from growing fast to cutting costs and trying to turn a profit. |
| This year, several of SoftBank’s portfolio companies laid off staff, scaled back or shut down. They included Brandless, an e-commerce business; Wag, a dog-walking service; Zume, a robot pizza company; and Getaround, a car-sharing company. In March, SoftBank’s bet on the satellite start-up OneWeb went sour when the company announced it had filed for bankruptcy and planned to sell itself. | This year, several of SoftBank’s portfolio companies laid off staff, scaled back or shut down. They included Brandless, an e-commerce business; Wag, a dog-walking service; Zume, a robot pizza company; and Getaround, a car-sharing company. In March, SoftBank’s bet on the satellite start-up OneWeb went sour when the company announced it had filed for bankruptcy and planned to sell itself. |
| The spread of the coronavirus has compounded the struggles, with start-ups across the tech industry having been affected. According to Layoffs.fyi, a site tracking start-up layoffs, more than 200 start-ups have cut nearly 20,000 jobs since March 11. | The spread of the coronavirus has compounded the struggles, with start-ups across the tech industry having been affected. According to Layoffs.fyi, a site tracking start-up layoffs, more than 200 start-ups have cut nearly 20,000 jobs since March 11. |
| Some of SoftBank’s investments, like the food delivery company DoorDash, have found their services in higher demand amid the economic disruptions caused by the pandemic. | Some of SoftBank’s investments, like the food delivery company DoorDash, have found their services in higher demand amid the economic disruptions caused by the pandemic. |
| But SoftBank’s investments in companies that provide services like ride hailing and hotel booking have made it vulnerable. The small-business lender Kabbage and the real estate broker Compass recently laid off and furloughed staff. Widespread shelter-in-place orders have dealt a further blow to WeWork, which has kept many of its co-working locations open amid the outbreak. | But SoftBank’s investments in companies that provide services like ride hailing and hotel booking have made it vulnerable. The small-business lender Kabbage and the real estate broker Compass recently laid off and furloughed staff. Widespread shelter-in-place orders have dealt a further blow to WeWork, which has kept many of its co-working locations open amid the outbreak. |
| Duncan Davidson, a venture capital investor at Bullpen Capital, said SoftBank had driven a bubble in overvalued start-up “unicorns” — private companies valued at $1 billion or more — that burst last year. | Duncan Davidson, a venture capital investor at Bullpen Capital, said SoftBank had driven a bubble in overvalued start-up “unicorns” — private companies valued at $1 billion or more — that burst last year. |
| “It was blowing up anyway, before the virus,” he said. “The virus makes the weaker ones more obviously weak.” | “It was blowing up anyway, before the virus,” he said. “The virus makes the weaker ones more obviously weak.” |
| Kyle Stanford, a venture capital analyst with PitchBook, a service that tracks start-up investments, said many venture capital firms were writing down the values of portfolio companies because of the pandemic, but “no other firm can match the scale of SoftBank” in its writedowns. | Kyle Stanford, a venture capital analyst with PitchBook, a service that tracks start-up investments, said many venture capital firms were writing down the values of portfolio companies because of the pandemic, but “no other firm can match the scale of SoftBank” in its writedowns. |
| Updated June 22, 2020 | |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| The Vision Fund “will have to choose its best investments to support” through the crisis, he said. | The Vision Fund “will have to choose its best investments to support” through the crisis, he said. |
| In February, Elliott Management, an activist investor, began agitating for change at SoftBank. Public market investors have discounted SoftBank’s stock to a fraction of the value of the firm’s holdings. | In February, Elliott Management, an activist investor, began agitating for change at SoftBank. Public market investors have discounted SoftBank’s stock to a fraction of the value of the firm’s holdings. |
| SoftBank said last month that it would sell down $41 billion of its assets — including a portion of its shares in the Chinese retail company Alibaba, its most successful investment — to shore up its cash position and finance an $18 billion investment in its own shares. | SoftBank said last month that it would sell down $41 billion of its assets — including a portion of its shares in the Chinese retail company Alibaba, its most successful investment — to shore up its cash position and finance an $18 billion investment in its own shares. |
| Even so, Mr. Son has often spoken of a 300-year investment horizon. SoftBank has announced a second Vision Fund, which it has claimed would be even bigger than the first. | Even so, Mr. Son has often spoken of a 300-year investment horizon. SoftBank has announced a second Vision Fund, which it has claimed would be even bigger than the first. |
| In a recent interview with Forbes, Mr. Son said he expected 15 Vision Fund portfolio companies to fail. But his grand vision for the Vision Fund, he said, was “unchanged.” | In a recent interview with Forbes, Mr. Son said he expected 15 Vision Fund portfolio companies to fail. But his grand vision for the Vision Fund, he said, was “unchanged.” |
| Ben Dooley reported from Tokyo, and Erin Griffith from San Francisco. | Ben Dooley reported from Tokyo, and Erin Griffith from San Francisco. |