SoftBank stock falls after terrible earnings report
Posted November 6, 2019 9:28 p.m. EST
CNN — Shares in SoftBank fell as much as 4% in Tokyo on Thursday after the company reported worse than expected losses for the third quarter.
Japan's broader Nikkei was mostly flat in morning trade. South Korea's Kospi Index declined 0.2%.
Hong Kong's Hang Seng Index edged down 0.3%, while China's Shanghai Composite fell 0.2%.
SoftBank reported operating losses of $6.5 billion after market close on Wednesday, weighed down by a massive hit to its tech fund. The Vision Fund has been hit by big losses in portfolio companies such as Uber and WeWork.
The stock recovered some of its losses by mid-morning Thursday and was last trading down about 0.8%.
SoftBank founder and CEO Masayoshi Son admitted he turned a "blind eye" to governance problems at WeWork, and said he learned a "harsh lesson" from the office sharing company's botched IPO attempt.
Bernstein analyst Chris Lane said in a research note Wednesday that Son's rescue package of WeWork "will vastly improve the return profile." He predicts that with better corporate governance and cost controls, WeWork "will turn cash flow positive in [about] 18 months."
In Hong Kong, shares in Hong Kong Exchanges and Clearing fell 0.3%.
The company, which operates the Hong Kong Stock Exchange, reported net profits of 2.2 billion Hong Kong dollars ($280 million) for the third quarter, slightly lower than market expectations. The exchange abandoned a bold, $37 billion bid to buy London's Stock Exchange last month.