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To be fair, so much of this is driven by market forces and Covid in general. Only WeWork was written down, the rest is the market absolutely tanking. I mean if
by irjustin 6y ago
To be fair, so much of this is driven by market forces and Covid in general.
Only WeWork was written down, the rest is the market absolutely tanking. I mean if you followed the index funds, you'd be posting ~20% losses right now. Earlier it was 30%.
I definitely would not want to be those portfolio managers right now, but it's not all completely them... yet.
- 9nGQluzmnq3M 6y agoIt's not really the stick market that's causing this, since few of Softbank's investments have IPOed yet. (The WeWork bubble, in particular, started deflating when they tried to list it.) The more immediate cause is that many of their companies are not profitable, which investors were willing to overlook because they were enticed by future profits. But now COVID is wreaking havoc on the whole economy, and these companies don't have any sort of path to profitability within a foreseeable timeframe.
- fastball 6y agoNope. This is for FY2019, which ended in March. COVID-19 is definitely not priced into this.
- colinmhayes 6y agoYes it is, March was the low point for the markets. They're up pretty big this quarter.
- eggsnbacon1 6y agoMight be true, but building a multibillion dollar investment strategy that falls apart during a market downturn is a very financial crisisy thing to do. Its easy to make money during a bull market, just toss money into an index fund. Uber and WeWork were both banking on increased travel and office presence. Seems like a dumb thing to do now that COVID has plowed everyone into remote work. It might have been a dumb thing to do even before. Crises tend to accelerate underlying societal changes. Remote work and online ordering were already at an all time high. The virus has pushed this increasing demand ahead a decade or more. Now I can even see my doctor from home, something unthinkable a few months ago. Travel is increasingly reserved for leisure. Uber might be okay but WeWork is on the wrong side of this. WeWork was a societal stepping-stone to remote work. We've blown past that checkpoint far sooner than expected
- jdmg94 6y agoWeWork is to remote work, as Cyber-Cafes were to home computers
- eggsnbacon1 6y agowell said, this is exactly what I believe as well.
- puranjay 6y agoTheir other big bet, Oyo, was already struggling with an ill-conceived expansion strategy and poor brand image in its local market.