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SoftBank Group Corp.’s (OTC:SFTBY) net loss for the year ended March 2020, is set to rise to $9.39 billion.
What Happened
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Three weeks after its previous forecast, SoftBank revised its projected non-operating losses to rise to nearly 1 trillion yen or $9.39 billion. 700 billion yen or $6.5 billion of these losses are related to its non-vision fund investments in WeWork.
Explaining the revision, SoftBank Group said, “The expected amount of such loss has increased compared to the previous forecasts as [SoftBank Group] expects to recognize new losses arising from the fair value measurement of the loan commitment and financial guarantee in favor of WeWork.”
The loan commitment refers to $2.2 billion in unsecured notes and the financial guarantee to a $1.75 billion letter of credit facility that SoftBank provided as part of a $9.5 billion rescue package for WeWork.
Why It Matters
This will mark the first time in 15 years that SoftBank will declare an operating loss.
Earlier this month, the Japanese conglomerate had projected a net loss of $7 billion, as its Vision Fund was expected to record a loss of $16.5 billion. Losses outside the fund were expected to amount to $7.4 billion.
SoftBank’s $9.5 billion bailout deal for WeWork included a promise to purchase shares in the office space provider, but the Japanese company reneged on the agreement citing WeWork’s non-compliance with agreed conditions.
Price Action
SoftBank’s OTC shares closed 2.45% higher at $22.13 on Wednesday. The company’s shares traded 2.47% higher at $44.27 at press time in Tokyo on Thursday.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.