By Benjamin Horney

Law360 (May 18, 2020, 8:18 PM EDT) -- The coronavirus pandemic has hit SoftBank hard, including an overall loss of 1.1 trillion yen ($10.2 billion) on investments from its $100 billion Vision Fund during the fourth quarter of 2019, the Japanese conglomerate said Monday.

That is merely one of multiple troubling results outlined as part of SoftBank Group Corp.'s latest financial report, released Monday with an adjoining investor presentation video. Economic turmoil stemming from the COVID-19 outbreak is causing difficulties for many of the companies SoftBank has invested in through its Vision Fund, which includes the likes of Uber Technologies Inc. and WeWork. The above-mentioned figure represents the losses on Vision Fund investments for just the fourth quarter; for the entire fiscal year ending March 31, 2020, the Vision Fund recorded an investment loss of almost $17 billion.

Of the roughly 88 total companies in which the Vision Fund has invested, 47 posted losses, and SoftBank is anticipating further adverse effects because of the uncertainty of how long the coronavirus will impact the global economy.

SoftBank has been aggressively buying and investing in technology companies through its Vision Fund for a few years now, and has even begun investing through a second vehicle, called Vision Fund 2, but the company realizes it is living in a new reality after the coronavirus.

Masayoshi Son, chief executive of SoftBank, compared the current economic environment to that of the Great Depression during the presentation, and noted that it took about a quarter century for the Dow Jones industrial average to fully recover. 

"[The coronavirus] may have a similar impact," he said.

SoftBank isn't simply sitting on its hands, however, with Son detailing that the company is continuing to invest using funds from Vision Fund 2. The capital for that fund mainly comes from SoftBank itself, however, with Son saying that the company is cautiously making new investments. If the investments made through Vision Fund 2 do well, perhaps SoftBank will be able to procure further funds from outside investors.

Meanwhile, SoftBank may be looking to offset some of the losses through divestitures, including the potential sale of a large slice of its stake in T-Mobile US Inc. That's according to a Monday report from the Wall Street Journal, which said that SoftBank is in talks to sell a significant portion of its T-Mobile holding to Deutsche Telekom AG, which already owns a 44% stake in T-Mobile. 

Despite the bleak outlook for the near-term, and possibly long-term future, Son said that SoftBank is well-positioned because its Vision Funds invest in the businesses of the future. He noted that, after the Great Depression, the economic bounceback was led by newer industries, and the same thing could happen now. He specified areas like online meeting, as well as online food delivery, online education, online medical care, online shopping and video streaming as waves of the future.

"Without touching physically, people can touch emotionally online, whether it be medical or in other areas," he said. "So for new industries and for the new era, I think those technologies will lead the rebound."

Unicorns, which are tech companies that have reached a value of $1 billion or more, could be especially important in helping the global economic recovery, he said.

"Our unicorns are facing serious challenges against the backdrop of the coronavirus outbreak, but I believe some of them will fly over the valley of the coronavirus, go beyond and fly high," he said.

--Editing by Michael Watanabe.

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