SoftBank says Jack Ma is leaving its board after it sinks to historic loss

SoftBank says Jack Ma is leaving its board after it sinks to historic loss

Hours before SoftBank reported a record annual operating loss of 1.36 trillion yen ($12.7 billion) — the worst in at least 20 years, according to the data provider Refinitiv — it announced that Alibaba (BABA) founder Jack Ma would resign from its board. Ma, who is still a director of the Chinese e-commerce company, had held the position for nearly 13 years.

Ma’s exit is particularly noteworthy because of his closeness to SoftBank founder and CEO Masayoshi Son. Son invested $20 million in Alibaba in 2000, a bet that was worth $60 billion when Alibaba went public in 2014.

SoftBank did not explain the reasoning behind Ma’s departure. But the company has been taking dramatic measures to shore up its finances, including a plan to sell $41 billion in assets.

During the earnings presentation Monday, Son revealed that the company had secured $11.5 billion in funding by doing deals that allow SoftBank to sell Alibaba stock in the future.

SoftBank’s 25.1% stake in the company is currently worth more than $133 billion.

It’s been a tumultuous time for SoftBank. The sweeping, worldwide restrictions on work and travel caused by the coronavirus pandemic have walloped the company’s investment portfolio.

Some of Son’s major tech investments, meanwhile, faced rough receptions on Wall Street long before the outbreak. The losses that SoftBank reported Monday were in line with its own recent forecasts and driven almost entirely by SoftBank’s Vision Fund, the $100 billion tech fund steered by Son.

SoftBank said the Vision Fund and affiliated funds suffered operating losses of 1.9 trillion ($17.7 billion) for the fiscal year that ended in March. The values of Uber (UBER), WeWork and other portfolio companies fell significantly in the three months to March “primarily due to the impact” of the virus, the company said.

“If the pandemic continues, the company expects that uncertainty in its investment businesses will remain over the next fiscal year,” SoftBank added.

Son is trying to right the ship. In March, the company made the surprise announcement that it would sell assets to buy back shares and reduce the company’s heavy debt load.

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The Japanese company on Monday also said it is buying back up to 500 billion yen ($4.7 billion) worth of shares over the next year, the second share purchase of this size since March. More buybacks are likely on the way: The company has said it wants to repurchase up to 2 trillion Japanese yen ($18 billion) in stock.
Shares in SoftBank closed up 1% in Tokyo, outperforming the broader Nikkei 225 (N225), which ended the day 0.5% higher. The stock has lost 21% since its most recent peak last July.

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