Masayoshi Son's latest SoftBank presentation shows wild optimism for WeWork's turnaround
Masayoshi Son opened his presentation by acknowledging the WeWork fiasco. "We are actually in a rough sea," he said.
He showed a picture of a rough sea to make his point.
The rough sea is overlaid with headlines in Japanese about SoftBank and WeWork.
Son said: "There [is a lot of] media coverage here and there, especially in the past two months. 'SoftBank may go bankrupt. Vision Fund is a big negative. Uber is in terrible share price after the IPO. WeWork may go bankrupt. And SoftBank is actually putting further money into this company so that it can go bankrupt altogether so that all the aggressive investment activity has been failed.' Such coverage... In a sense, it may be true."
Son took on the elephant in the room — SoftBank's bet on WeWork and how much it cost the company
"My judgment in investment was not right in many ways, so I regret [that] in many ways," he said.
He dug into how much SoftBank lost on WeWork
Its combined loss on its WeWork shares was $8.2 billion across the Vision Fund and SoftBank Group.
After questions about how highly WeWork was valued, Son showed this slide explaining the Vision Fund's valuation process
SoftBank's aggressive approach to valuations has raised eyebrows. WeWork, for example, was valued at $47 billion at its peak. And one of SoftBank's executives once said the office-sharing firm could be worth $100 billion.
According to SoftBank's financials, it's actually now worth around $8 billion.
Son acknowledged that WeWork is a massively loss-making business, pointing to its low gross profits and high operating costs...
...but he has a plan
But check out the small print. It reads: "There can be no assurance that the strategy of SBG set forth herein will be successful."
But if it is successful, here's how he thinks WeWork's profits will look
One Twitter user, described the slide thus: "Masa is a goddamn comic genius... this gold from from his latest deck."
masa is a goddamn comic genius
this gold from from his latest deck pic.twitter.com/BMD0rf4JaM
...again, it comes with small print
It reads: "This hypothetical illustration is provided solely for illustrative purposes, reflects the current beliefs of SBG as of the date hereof, and is based on a variety of assumptions and estimates...
"Accordingly, actual results may differ materially from the hypothetical illustration presented herein. For the avoidance of doubt, this illustration does not reflect actual results or metrics from the company."
Once gross profit and those massive operating expenses are sorted out, Son anticipates profitability
Look at that hockey stick!
And after this turnaround plan, it will be back to calm seas
Son said: "We don't see any rough sea. It's just the gentle waves in the sea."
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