SoftBank to pay a price for betting on startups

■ SOFTBANK is set to book a massive writedown on WeWork, Uber

■ Masayoshi Son’s fortune is down 30% from July to about $13.8 billion

■ Investors are wondering if WeWork is just the tip of the iceberg for SoftBank’s trouble

Fund. SoftBank is expected to post an operating loss of 48 billion yen ($442 million) for the JulySeptember quarter on Wednesday, according to the average forecast of four analyst estimates compiled by Refinitiv.

That would be its first quarterly loss in 14 years, Refinitiv data shows, and compares with an operating profit of 706 billion yen a year earlier.

SoftBank has delivered multiple quarters of sector-beating gains, driven by internal revaluations of tech bets by the Vision Fund, which had its first major close in May 2017.

Analysts estimates vary widely, in part because SoftBank provides little detail on how it accounts for those gains or losses on its books.

A further lack of disclosure over valuations would “risk losing the trust of investors,” said Amir Anvarzadeh, market strategist at Asymmetric Advisors.

Given its falling share price — down around 30% since July — the conglomerate may unveil a share buyback of around 500 billion yen to try and stem the slide, Anvarzadeh said. SoftBank announced a 600 billion yen buyback in February.

Investors will be looking closely at how SoftBank accounts for the value of its stake in WeWork, into which it has poured $13 billion to take a majority stake. WeWork was valued by SoftBank as high as $47 billion as recently as January but is currently valued at just $8 billion.

The Japanese company is expected to announce a writedown of at least $5 billion due to a slump in the values of WeWork and others.