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| SoftBank in Crisis Amid Record Losses | SoftBank in Crisis Amid Record Losses |
| (8 days later) | |
| TOKYO — His flagship tech fund is losing money. His company just posted billions in losses. And a key ally, the Chinese technology mogul Jack Ma, stepped aside. | TOKYO — His flagship tech fund is losing money. His company just posted billions in losses. And a key ally, the Chinese technology mogul Jack Ma, stepped aside. |
| Yet Masayoshi Son, the exuberant chief executive of the Japanese conglomerate SoftBank, mustered another spirited defense of his troubled empire on Monday, shifting from contrite to brash and back again in a performance that sought to both reassure investors and restore his own bruised reputation. | Yet Masayoshi Son, the exuberant chief executive of the Japanese conglomerate SoftBank, mustered another spirited defense of his troubled empire on Monday, shifting from contrite to brash and back again in a performance that sought to both reassure investors and restore his own bruised reputation. |
| Mr. Son gave his financial presentation just hours after SoftBank announced that Mr. Ma, a co-founder of the Chinese e-commerce giant Alibaba, had resigned from its board. That news was quickly followed by an earnings report describing losses that were the largest on record for any listed Japanese company, according to NHK, the Japanese public broadcaster. | Mr. Son gave his financial presentation just hours after SoftBank announced that Mr. Ma, a co-founder of the Chinese e-commerce giant Alibaba, had resigned from its board. That news was quickly followed by an earnings report describing losses that were the largest on record for any listed Japanese company, according to NHK, the Japanese public broadcaster. |
| SoftBank posted an operating loss of 1.36 trillion yen, or $12.7 billion, in the fiscal year that ended March 31, its first annual loss in 15 years. It reported a profit of $19.6 billion the previous year. Its net income loss was $894 million. | SoftBank posted an operating loss of 1.36 trillion yen, or $12.7 billion, in the fiscal year that ended March 31, its first annual loss in 15 years. It reported a profit of $19.6 billion the previous year. Its net income loss was $894 million. |
| The dismal results were driven largely by SoftBank’s big bets on a series of technology-related companies that had once been the darlings of the start-up world. Those included WeWork, the office space company, and Uber, as well as poor showings by other companies that have been hit hard by the coronavirus pandemic. | The dismal results were driven largely by SoftBank’s big bets on a series of technology-related companies that had once been the darlings of the start-up world. Those included WeWork, the office space company, and Uber, as well as poor showings by other companies that have been hit hard by the coronavirus pandemic. |
| Investors had been bracing for the results. SoftBank warned them twice that its $100 billion Vision Fund — an investment vehicle that became a major finance force in the technology world — would post a loss on the order of $16.7 billion. | Investors had been bracing for the results. SoftBank warned them twice that its $100 billion Vision Fund — an investment vehicle that became a major finance force in the technology world — would post a loss on the order of $16.7 billion. |
| The company’s losses were slightly higher than its estimates, and the Vision Fund reported a loss of $17.7 billion. | The company’s losses were slightly higher than its estimates, and the Vision Fund reported a loss of $17.7 billion. |
| With the pandemic in mind, SoftBank joined other major corporations in declining to forecast its earnings for the coming fiscal year. Because of the virus, it said, “it remains difficult to forecast the medium-term impact on the company’s business and financial results.” | With the pandemic in mind, SoftBank joined other major corporations in declining to forecast its earnings for the coming fiscal year. Because of the virus, it said, “it remains difficult to forecast the medium-term impact on the company’s business and financial results.” |
| The results are a downfall for the Vision Fund, which upended the start-up investment world when it began writing large checks to young tech companies in 2017. Mr. Son was called a “one-man bubble maker” for pushing companies to supersize their ambitions while giving them enough cash to ignore the pesky chore of turning a profit. Competing venture capital firms had to raise larger funds to keep up. | The results are a downfall for the Vision Fund, which upended the start-up investment world when it began writing large checks to young tech companies in 2017. Mr. Son was called a “one-man bubble maker” for pushing companies to supersize their ambitions while giving them enough cash to ignore the pesky chore of turning a profit. Competing venture capital firms had to raise larger funds to keep up. |
| During his presentation, Mr. Son refused to be drawn out about Mr. Ma’s departure, saying that Mr. Ma had made the decision on his own and that the two men “will remain friends for the rest of our lives.” Last year, Mr. Ma retired as executive chairman of Alibaba, saying he would pull back from his business endeavors to focus on philanthropy. | During his presentation, Mr. Son refused to be drawn out about Mr. Ma’s departure, saying that Mr. Ma had made the decision on his own and that the two men “will remain friends for the rest of our lives.” Last year, Mr. Ma retired as executive chairman of Alibaba, saying he would pull back from his business endeavors to focus on philanthropy. |
| Mr. Son was an early investor in Alibaba. His $20 million initial stake grew to be valued at more than $100 billion, making it one of the best venture capital investments in history and among SoftBank’s most valuable holdings. | Mr. Son was an early investor in Alibaba. His $20 million initial stake grew to be valued at more than $100 billion, making it one of the best venture capital investments in history and among SoftBank’s most valuable holdings. |
| The company has used those assets as collateral to help transform itself from a telecom firm into the world’s largest and most powerful tech investor. Through the Vision Fund, financed in part with money from sovereign wealth funds in Saudi Arabia and Abu Dhabi, Mr. Son pumped enormous amounts of capital into cutting-edge and often risky start-ups, companies that he believes have the potential to effectively monopolize entire industries. | The company has used those assets as collateral to help transform itself from a telecom firm into the world’s largest and most powerful tech investor. Through the Vision Fund, financed in part with money from sovereign wealth funds in Saudi Arabia and Abu Dhabi, Mr. Son pumped enormous amounts of capital into cutting-edge and often risky start-ups, companies that he believes have the potential to effectively monopolize entire industries. |
| That vision was challenged last year by the spectacular implosion of WeWork over allegations of mismanagement and self-dealing. WeWork’s failed initial public offering spurred a new focus on profits over growth among start-ups. Prominent SoftBank-backed companies including the dog-walking service Wag, the robot pizza maker Zume and the car-sharing service Getaround scaled back after Mr. Son told many of them that they must become self-sufficient. | That vision was challenged last year by the spectacular implosion of WeWork over allegations of mismanagement and self-dealing. WeWork’s failed initial public offering spurred a new focus on profits over growth among start-ups. Prominent SoftBank-backed companies including the dog-walking service Wag, the robot pizza maker Zume and the car-sharing service Getaround scaled back after Mr. Son told many of them that they must become self-sufficient. |
| Now the coronavirus has threatened to destroy Mr. Son’s dream. It has drained huge amounts of value from SoftBank-backed companies like Uber and Oyo, the Indian hospitality company, which have proved particularly susceptible to the pandemic’s effects. On Monday, Uber laid off an additional 3,000 employees and closed 45 offices around the world, after cutting thousands of other jobs this month. | Now the coronavirus has threatened to destroy Mr. Son’s dream. It has drained huge amounts of value from SoftBank-backed companies like Uber and Oyo, the Indian hospitality company, which have proved particularly susceptible to the pandemic’s effects. On Monday, Uber laid off an additional 3,000 employees and closed 45 offices around the world, after cutting thousands of other jobs this month. |
| In a note to employees about the latest cuts, Uber’s chief executive, Dara Khosrowshahi, said it was time for the ride-hailing company to move on from its reliance on venture capital. | In a note to employees about the latest cuts, Uber’s chief executive, Dara Khosrowshahi, said it was time for the ride-hailing company to move on from its reliance on venture capital. |
| “We must establish ourselves as a self-sustaining enterprise that no longer relies on new capital or investors to keep growing, expanding and innovating,” he wrote in the email, which was seen by The New York Times. | “We must establish ourselves as a self-sustaining enterprise that no longer relies on new capital or investors to keep growing, expanding and innovating,” he wrote in the email, which was seen by The New York Times. |
| Mr. Son has remained unbowed. Last month, SoftBank said it would sell down $41 billion of its assets to increase its cash reserves and finance an ambitious plan to buy back $23 billion of its own shares and shore up its falling stock price. | Mr. Son has remained unbowed. Last month, SoftBank said it would sell down $41 billion of its assets to increase its cash reserves and finance an ambitious plan to buy back $23 billion of its own shares and shore up its falling stock price. |
| In a separate announcement on Monday, SoftBank said it would spend $4.7 billion toward that goal by the end of March 2021, doubling the amount it had already pledged in March. | In a separate announcement on Monday, SoftBank said it would spend $4.7 billion toward that goal by the end of March 2021, doubling the amount it had already pledged in March. |
| The money to finance it, Mr. Son confirmed during his presentation, came in part from sales of the company’s position in Alibaba. | The money to finance it, Mr. Son confirmed during his presentation, came in part from sales of the company’s position in Alibaba. |
| Shares of SoftBank in Tokyo closed up more than 1 percent Monday. | Shares of SoftBank in Tokyo closed up more than 1 percent Monday. |
| Mr. Ma’s departure from SoftBank’s board followed the exit late last year of Tadashi Yanai, the founder and president of the Japanese clothing retailer Uniqlo. Mr. Yanai, a longtime ally of Mr. Son’s, was seen as a moderating influence. | Mr. Ma’s departure from SoftBank’s board followed the exit late last year of Tadashi Yanai, the founder and president of the Japanese clothing retailer Uniqlo. Mr. Yanai, a longtime ally of Mr. Son’s, was seen as a moderating influence. |
| In a presentation that started with a funereal tone and ended with a breath of fire, Mr. Son defended SoftBank’s performance, switching between playing up and playing down the threat of the pandemic to the Vision Fund’s investment portfolio. | In a presentation that started with a funereal tone and ended with a breath of fire, Mr. Son defended SoftBank’s performance, switching between playing up and playing down the threat of the pandemic to the Vision Fund’s investment portfolio. |
| Updated July 7, 2020 | |
| The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization. | |
| 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. |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| 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. | 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. |
| 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. |
| Speaking to what appeared to be an empty room, he presented a PowerPoint deck that began with a history lesson about the Great Depression before going on to quote statistics about the impact of the coronavirus on the global economy — data on everything from the drop in restaurant sales to the rise in layoffs. | Speaking to what appeared to be an empty room, he presented a PowerPoint deck that began with a history lesson about the Great Depression before going on to quote statistics about the impact of the coronavirus on the global economy — data on everything from the drop in restaurant sales to the rise in layoffs. |
| One slide showed a herd of unicorns — a nickname for companies valued at $1 billion or more — running up a hill and plunging into a pit labeled “Valley of the Coronavirus.” One of them sprouted wings, an image that Mr. Son said represented how some of the Vision Fund’s investments, particularly those in the medical sector, would “lead the rebound.” | One slide showed a herd of unicorns — a nickname for companies valued at $1 billion or more — running up a hill and plunging into a pit labeled “Valley of the Coronavirus.” One of them sprouted wings, an image that Mr. Son said represented how some of the Vision Fund’s investments, particularly those in the medical sector, would “lead the rebound.” |
| “Some of our unicorns will fly,” he added. | “Some of our unicorns will fly,” he added. |
| Returning to the subject of the Great Depression, Mr. Son asked investors to consider how that calamity had transformed the economic landscape, allowing new technologies to flourish. | Returning to the subject of the Great Depression, Mr. Son asked investors to consider how that calamity had transformed the economic landscape, allowing new technologies to flourish. |
| “This shock from the corona outbreak will accelerate the paradigm shift toward a new era,” he said, adding that the Vision Fund’s investments were well positioned to take advantage of fundamental transformations in people’s lives, such as moving work and medicine online. | “This shock from the corona outbreak will accelerate the paradigm shift toward a new era,” he said, adding that the Vision Fund’s investments were well positioned to take advantage of fundamental transformations in people’s lives, such as moving work and medicine online. |
| “We look forward to navigating the challenges,” he said. | “We look forward to navigating the challenges,” he said. |
| Still, some of his unicorns had fallen farther than others, Mr. Son admitted. Of the 88 companies in the Vision Fund, 47 were losing money at the end of March, and the portfolio was worth about 1 percent less than the sum of money it had invested. | Still, some of his unicorns had fallen farther than others, Mr. Son admitted. Of the 88 companies in the Vision Fund, 47 were losing money at the end of March, and the portfolio was worth about 1 percent less than the sum of money it had invested. |
| The situation, he said, is “not that great,” adding that it had led the company to stop seeking outside investment for a second and even larger iteration of the fund, known as Vision Fund II, announced last summer. | The situation, he said, is “not that great,” adding that it had led the company to stop seeking outside investment for a second and even larger iteration of the fund, known as Vision Fund II, announced last summer. |
| The humility was short-lived. As reporters peppered Mr. Son with questions about the first Vision Fund’s valuation, his characteristic fire returned. | The humility was short-lived. As reporters peppered Mr. Son with questions about the first Vision Fund’s valuation, his characteristic fire returned. |
| Asked if he considered his investments a failure, Mr. Son pushed back: “I’d say it’s not too bad, considering the very poor market climate.” | Asked if he considered his investments a failure, Mr. Son pushed back: “I’d say it’s not too bad, considering the very poor market climate.” |
| The coronavirus crash was tough, he said, but he had seen worse. After the tech bubble burst in the late 1990s, he added, it was as though he were hanging from a cliff “with two fingers.” This time, he said, “compared to the past crisis, I’m just looking down at the bottom of the valley from above.” | The coronavirus crash was tough, he said, but he had seen worse. After the tech bubble burst in the late 1990s, he added, it was as though he were hanging from a cliff “with two fingers.” This time, he said, “compared to the past crisis, I’m just looking down at the bottom of the valley from above.” |
| But Mr. Son acknowledged there was still a long way to fall. | But Mr. Son acknowledged there was still a long way to fall. |
| “Things will probably get worse,” he said, “but we will keep working hard to survive.” | “Things will probably get worse,” he said, “but we will keep working hard to survive.” |
| Ben Dooley reported from Tokyo, and Erin Griffith from San Francisco. Kate Conger contributed reporting from Oakland, Calif. | Ben Dooley reported from Tokyo, and Erin Griffith from San Francisco. Kate Conger contributed reporting from Oakland, Calif. |