Masa-Son Steps Back From Running Softbank, Personally Owes Almost $5 Billion To Troubled Tech Giant

It has not been a good week (or year for that matter) for Masayoshi Son – the founder of (once giant) tech fund SoftBank.

First, The FT reports that, according to a person familiar with the matter, SoftBank will likely be forced to write down its approximately $100 million investment in collapsing crypto exchange FTX to zero.

Second, and perhaps related to that, following its report last week that the technology conglomerate posted quarterly investment losses of $10 billion, Son said he would step back from running day-to-day operations at SoftBank (to “devote” himself to turbocharging the growth of UK chip designer Arm, which is owned by the Japanese group).

SoftBank also cut 30% of its Vision Fund staff by the end of September and has sharply reduced the size of its investments over the past six months.

On Friday, Son emphasized that he was “perfectly healthy”, in response to speculation he was ill after SoftBank revealed that he would no longer be giving his signature presentation to investors using his eccentric slides (as we have often noted).

Finally, and perhaps most ominously, The FT reports that Masayoshi Son personally owes SoftBank close to $5bn because of growing losses on the Japanese conglomerate’s technology bets, which have also rendered the value of his stake in the group’s second Vision Fund worthless.

As various massive tech bets have imploded, the SoftBank founder’s losses have mounted because SoftBank fronted Son the money to invest in its technology-related funds.

The value of Son’s 17.25% stake in SoftBank’s second Vision Fund (which was as high as $2.8bn at the end of 2021) was also wiped out entirely by the end of September.

SoftBank has not yet collected $2.8 billion that Son owes in relation to his stake in the fund (and The FT does note that Son is under no obligation to repay for many years). Previously, SoftBank netted off the value of his equity from the amount he owed the group, meaning at the end of 2021 this stood at just $4 million – but now that’s all gone and just the liability is left.

Son also owes SoftBank $669mn under a similar arrangement on its Latin American fund.

The total amount the Japanese executive owes his company is now at $4.7bn, when losses in the group’s short-lived internal hedge fund SB Northstar (which earned notoriety for carrying out the “Nasdaq whale”/gamma-squeeze trades in US tech stocks in 2020) are also taken into account, SoftBank confirmed to the FT.

According to Bloomberg, Son’s net worth stood at $13.9 billion (though it is unclear whether that is ‘net’ of this massive loan from Softbank).

Given all the self-dealing, inter-company loans, and cross-holdings, one can’t help but wonder if Masa-son is nothing more than a more polished version of SBF…

Step aside @SBF_FTX, here comes the real bubble master: Masayoshi Son owes $4.7bn to SoftBank following tech rout : FT

— zerohedge (@zerohedge) November 17, 2022

Tyler Durden
Thu, 11/17/2022 – 22:00


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