By Anton Bridge
TOKYO (Reuters) -SoftBank Group booked a $5.2 billion quarterly loss on Thursday, its fourth straight quarter in the red, as the Japanese giant took a hit from the bankruptcy of WeWork, once one of its highest-flying investments.
It was a fresh reminder of the volatility inherent in founder Masayoshi Son's strategy of betting big on often risky start-ups.
WeWork, the office-sharing start-up whose aim to disrupt global commercial property once brought it a $47 billion valuation, sought U.S. bankruptcy protection on Monday, cementing a remarkable fall from grace.
SoftBank (TYO:9984) reported a 789 billion yen ($5.2 billion) net loss for the three months to end-September, compared with a 3.0 trillion profit a year earlier when it sold down a large portion of its stake in Chinese e-commerce giant Alibaba (NYSE:BABA).
It recorded 234.4 billion yen of losses related to WeWork exposure in the first half of the year.
WeWork's bankruptcy was a "great shame", Chief Financial Officer Yoshimitsu Goto told a briefing, adding the company needed to learn what went wrong to help its future investment activity.
But he also sounded an optimistic note, saying he believed SoftBank had "hit the bottom" and was making progress towards profitability.
NEW DRIVER
Chip designer Arm, which went public during the quarter, would be the new driver of value for SoftBank, he said.
It recorded a capital surplus of $4.65 billion from the listing's proceeds.
After playing defence for some time, SoftBank has said it is looking to take a more active investing role again, particularly by focusing on artificial intelligence.
It has been "carefully restarting" investment, Goto said, emphasising that it was being selective with a focus on AI and future growth.
Its Vision Fund investment unit booked an investment profit of 21.4 billion yen in the latest quarter, after posting a 160 billion yen investment profit three months earlier.
SoftBank said it had exchanged unsecured WeWork notes into shares and convertible bonds, logging a 21.6 billion yen loss from the transaction in the first half.
While SoftBank has largely written down billions of dollars of investment in WeWork over the years, it said on Thursday its pledge to provide credit support for WeWork increased the investment firm's liabilities by 57.5 billion yen last quarter.
($1 = 151.0200 yen)