SoftBank leader Masayoshi Son admitted it was a mistake to have invested in WeWork, the besieged office space rental company in chaos since an attempt to go public, revealed systematic maladministration and ridiculous behavior by the founder and CEO.
At a profit conference, Son said WeWork's problems resulted in "a pretty big impact" on SoftBank and its Vision Fund. "In many respects my opinion on investments was incorrect," said SonBank translator, adding that he regretted the decision.
The comments followed after SoftBank recorded a loss of $ 6.5 billion in the second quarter, the company's largest quarterly loss ever according to The Wall Street Journal. SoftBank and the Vision Fund jointly wrote $ 8.2 billion on WeWork; the Vision Fund also wrote investments in more than 20 other companies, including Uber, according to the diary.
Son said he had a "simple" three-step turnaround plan for WeWork, which is now largely in the hands of SoftBank. The first step is that WeWork stops building new offices for three to four years, because new construction entails high costs. The second is for WeWork to save costs elsewhere, which should help with less construction. And thirdly, WeWork can close off side companies that are not profitable. "So through those three initiatives we believe we can have a big improvement in WeWork," said Son.
In the end, Son was optimistic about the potential to turn WeWork into a vibrant, profitable company. Despite owning 80 percent of the company, SoftBank does not have complete control over WeWork. However, after a $ 9.5 billion bailout, SoftBank was able to install a self-elected executive chairman – Marcelo Claure, who was previously in charge of Sprint, another SoftBank company.