BREAKING NEWS

SoftBank shares fall as it doubles down on WeWork

SoftBank shares fall as it doubles down on WeWork
FILE PHOTO: SoftBank Corp placard is prepared during a ceremony to mark the company's debut on the Tokyo Stock Exchange in Tokyo, Japan December 19, 2018. REUTERS/Issei Kato -
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Issei Kato(Reuters)
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By Sam Nussey

TOKYO (Reuters) – Shares of SoftBank Group Corp <9984.T> fell 2% in early trade on Wednesday as the tech conglomerate moved to take over beleaguered office-space sharing startup WeWork with a funding injection of more than $10 billion (£7.76 billion).

The deal takes SoftBank’s total investment in WeWork to more than $19 billion, sources told Reuters on Tuesday, with the money-losing startup now valued at just $8 billion.

SoftBank’s shares have fallen 30% from their July peak as investor scepticism grows over the path to profitability for its cash-burning marquee investments like WeWork and publicly listed Uber Technologies Inc <UBER.N>.

The highly leveraged group, which is facing chunky writedowns on the valuations of many of its tech bets when it reports second-quarter earnings next month, is seeking to avoid consolidating WeWork on its books, one source said.

The disarray at WeWork, which is scrambling for cash following a flopped IPO attempt, comes as SoftBank founder and CEO Masayoshi Son struggles to raise money for a successor to his $100 billion Vision Fund, sources told Reuters earlier this month.

Japan’s benchmark index <.N225> was flat on Wednesday as trading restarted following a public holiday.

(Reporting by Sam Nussey; Editing by Clarence Fernandez; Editing by Stephen Coates)

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