How Softbank's VisionFund rode the pandemic to an $8 billion net profit last quarter
12 February 2021
SoftBank's Vision Fund went from being in the red, with an annual operating loss of $18 billion at one point, to an $8 billion net profit in its most recent quarter — thanks in no small part to the past year's unexpected events.
Why it matters: While the Vision Fund's bet on a global shift to digital services is likely correct, it's hard to believe its financial performance would have rebounded so quickly had 2020 gone differently.
The pandemic...
- It's been a huge accelerant for trends central to Vision Fund's thesis and many of its portfolio companies — food delivery, online education, e-commerce, and so on.
- SoftBank's defensive moves in the spring, including stock buybacks and writing down more poorly performing companies, put it a position to benefit even more from the surprising boom on the stock market that followed.
- Even WeWork—which fell so hard, so fast when it tried to go public in 2019 — could be the one office co-working company left standing after the pandemic. Regus properties have been filing for bankruptcy (and its parent company just acquired a majority stake in embattled women-focused clubhouse The Wing), as has Knotel, another venture-backed rival that was once valued at $1.6 billion.
The stock market...
- It didn't get the memo that there's a global pandemic and massive economic hit — it just kept going up and to the right.
- 11 of SoftBank's portfolio companies have gone public since the pandemic began, helping to contribute to the Vision Fund's $13 billion in investment gains just in the last quarter.
- Even portfolio companies that were already public performed well, adding to the fund's recent success.
The other side:
- For one, luck isn't everything — the fund's performance is tied to CEO Masayoshi Son's fundamental investment thesis staying focused on digital technologies.
- A great market won't do very much for a portfolio of weak companies that won't be able to go public or continue to grow in value. In short: SoftBank did well in picking eventual winners.
- And now, three-and-a-half years into the Vision Fund, SoftBank is past the trough of the expected J-curve, which is par for the course in venture investing. As they say: things get worse before they get better.
The bottom line: "Luck is what happens when preparation meets opportunity," Roman philosopher Seneca once wrote.
Transcripts show George Floyd told police "I can't breathe" over 20 times
Section2Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.
Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.
The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.
- The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.
What the transcripts say:
- Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
- The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
- Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."
Read the transcripts via DocumentCloud.