Alibaba’s Jack Ma leaves SoftBank’s board of directors after huge losses at Vision Fund

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Jack Ma, CEO of Chinese e-commerce giant Alibaba, speaks during his visit to the Vivatech startup and innovation fair in Paris on May 16, 2019.

Philippe Lopez | AFP | Getty Images

Alibaba founder Jack Ma leaves SoftBank’s board after the company’s Vision Fund recorded record losses of $ 18 billion.

Ma, whose net worth of $ 41.8 billion makes him the wealthiest man in China, is the latest to leave SoftBank Group, which posted total annual losses of $ 13 billion on Monday. the year ending March 31. Uniqlo founder Tadashi Yanai has resigned from SoftBank. in December, while Nidec founder Shigenobu Nagamori resigned in 2017.

SoftBank did not provide a reason for Ma’s resignation, but has increasingly focused on educational philanthropy in the past year. He resigned as president of Alibaba last September and there is speculation that he will step down from Alibaba’s board later this year.

Whatever the reasons, Ma’s departure (effective June 25) comes after SoftBank founder Masayoshi Son abandoned telecommunications to support new businesses with the colossal $ 100 billion Vision Fund launched in 2017.

In total, the Vision Fund supported 88 start-ups with a total of $ 75 billion. The Vision Fund, which counts Apple and the Saudi sovereign wealth fund as one of its contributors, is in poor health as many of its biggest bets have turned out to be disasters.

A huge $ 9 billion bet on WeWork turned out to be a very bad decision after the office space provider dramatically imploded months before the coronavirus wreaked havoc in global economies. With dozens of empty multi-story offices around the world, the situation for WeWork is only likely to get worse.

The Vision Fund has also injected billions of dollars into companies such as the Uber taxi app and the Indian hotel chain Oyo, which have seen their ratings collapse in recent months due to, among other things, coronavirus and containment measures.

“The values ​​of Uber, WeWork and its three affiliates have declined and the total fair value of the other companies in the portfolio has decreased significantly,” SoftBank wrote in its financial report.

Old friends

Ma and Son, two of Asia’s best-known tech moguls, are close friends and have had a relationship for at least 20 years, as Son was one of Alibaba’s first investors. In 2000, a year after Alibaba was founded, SoftBank invested $ 20 million in the business. A SEC filing in February showed that SoftBank owns about 25% of Alibaba, a stake worth more than $ 100 billion, making it the most valuable investment for the SoftBank group.

SoftBank’s stock hit a four-year low on March 19, prompting the group to announce plans to sell or monetize $ 41 billion of its assets and buy back $ 4.7 billion of its shares.

CNBC had no immediate response from Alibaba or SoftBank when it contacted them for comment.

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