SoftBank’s profit on DoorDash IPO will offset WeWork disaster, says analyst

Masayoshi Son-led SoftBank Group’s around $10 billion profit from its investment in the food delivery startup DoorDash’s IPO will offset the losses the Japanese conglomerate incurred from coworking company WeWork’s failed IPO, according to Astris Advisory Japan’s Chief Investment Advisor and Founder David Gibson. “They’re going to book 10 billion gain, that offsets the disaster of WeWork only a few quarters ago,” he told CNBC. According to SoftBank, its Vision Fund business had recorded a $17.7 billion loss in the last fiscal year following writing down the value of investments including Uber and WeWork. The overall operating loss for SoftBank was $12.7 billion and a net loss of $9 billion, according to a company statement.

Gibson said that around $2 billion SoftBank’s investment in the Doordash IPO — a stake which is now worth over $12 billion, giving it a $10 billion profit. “Suddenly Masa goes from losing to being hero very quickly,” said Gibson. Ahead of the IPO, DoorDash had filed its IPO prospectus with the US Securities and Exchange Commission last month reporting $1.9 billion in revenue for the nine months ended September 30 — up from $587 million during the year-ago period. Importantly, with revenue growth, its losses reduced to $149 million over the same period in 2020 down from $533 million over the had 1 million delivery workers and over 18 million customers.

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SoftBank’s first Vision Fund, which had raised a commitment of $98.6 billion had received a commitment worth $65.5 billion from the third party or external investors while $33.1 billion was committed by SBG and its subsidiaries. As of September 30, 2020, the fund had put $75 million in 83 companies including Indian companies such as Paytm, Delhivery, Grofers, Policy Bazaar, OYO, Ola, etc. The fund recorded $7.6 billion of unrealized valuation gain, of which $4 billion was recorded on unlisted companies in its portfolio. SoftBank Group had reported a $6.1 billion profit for the September quarter in comparison to the $6.5 billion loss in the year-ago period.