SoftBank Group Corp. is not having a happy time of it. First, came the pandemic, and with it several missteps at portfolio companies like WeWork and Greensill; then a downturn in tech stocks that hit holdings such as Coupang Inc. and Alibaba Group Holding Ltd; and now an exodus of top executives just as the Japanese conglomerate’s founder, Masayoshi Son, plot a new course for the company.
Masayoshi Son is losing a growing number of top executives at SoftBank ever since he announced plans to turn the telecom conglomerate into an investment holding company five years ago.
Bloomberg News reported last week that two more managing partners at the company’s Vision Fund, Yanni Pipilis and Munish Varma, are now departing. This brings the total number of high-profile departures at SoftBank to at least 10 since March 2020. As he launches his own investment fund, Rajeev Misra, the longtime leader of the Vision Fund, is resigning from the majority of his positions and duties. While Chief Strategy Officer Katsunori Sago, who served on SoftBank’s board with Misra and Claure, resigned in 2021, Chief Operating Officer Marcelo Claure left earlier this year.
As Son charts a new course for the company he founded four decades ago, he finds himself increasingly on his own. After suffering significant losses, the 64-year-old is turning his attention away from the Vision Fund and onto new options, particularly the UK chip company Arm Ltd., according to sources familiar with the matter. The people, who requested anonymity since the conversations are private, claimed that Son is preparing to go public next year by repositioning the chip designer and increasing revenues in order to broaden its appeal.
Masayoshi Son has had retaining executives. He declined to offer the kind of profit sharing or deal-by-deal “carry” that venture capital firms give partners to make up for winners when he founded the original $100 billion Vision Fund in 2017. The problem has worsened as a result of losses at the Vision Fund in recent years, which has left little total profit to attract top performers.
The top executives behind Masayoshi only receives crumbs, according to David Gibson, senior research analyst at MST Financial Services.
According to insider sources, SoftBank is offering side deals instead of increasing compensation. These came in the form of huge loans to senior staff that frequently had drawbacks for the borrowiers.
According to Bloomberg Intelligence analysts Marvin Lo and Chris Muckensturm, SoftBank is expected to report earnings on August 8 and may post another loss after the 2.1 trillion yen in losses from the previous fiscal quarter.
According to files it has seen, the Financial Times stated that SoftBank had raised up to $22 billion in cash through the selling of prepaid forward contracts using Alibaba shares. Since at least 2016, SoftBank has increased cash flow through the use of such derivatives; nevertheless, the current sum would be higher than the $13.17 billion SoftBank announced in its earnings report, which was released in May.
