SoftBank Created the Earnings Deck to End All Earnings Decks
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I tip my hat to the person(s) responsible for creating SoftBank’s pitch decks. I can’t remember the last time a deck on earnings made me laugh out loud on the subway. WeWork wasn’t able to elevate our consciousness, but I promise you that this deck will. It’s chock full of delicious detail — be it on hypotheticals or other stuff.
The pitch deck made its way through VC Twitter last night with many people (including me) initially thinking it was fake. It’s not. The full presentation is publicly available under the investor relations tab of SoftBank’s website.
Let’s deconstruct several of the slides about WeWork. The first WeWork slide features a dark, stormy sea with the words “Significant decrease in profit” and “WeWork problem” overlayed on top.
And then come a number of slides on hypotheticals. The most eye-catching is one titled “Hypothetical Illustration of EBITDA.” It features a downward-sloping line in which the very bottom shows an arrow that marks “future,” and then *bam* a timeline that shoots up-and-to-the right emerges (although at one point it appears to actually go back in time) with a note saying, “Aim to achieve turnaround.”
One person on Twitter called it “this year’s most optimistic slide.” Another said, “The confidence to go with a scale of ‘0 to Future’ on the X axis and no Y axis makes me think the Vision Fund II fundraise is going better than most in the press would have us believe.”
So how exactly do they hope to achieve that plan? Well, it’s clear as day, and it can be summed up in one slide:
If you’ve followed SoftBank’s Masayoshi Son for long enough, you know that the WeWork fiasco isn’t where the story ends. In his eyes, he has plenty of time. WeWork and Uber may be losing money now, but they will be substantially profitable in 10 years’ time, Son said in a recent interview. Two years ago, I discovered a 2010 SoftBank deck, which outlines the Japanese behemoth’s 30-year vision through some just-as-entertaining slides.
Here’s the non-hypothetical reality though: SoftBank on Wednesday tallied up the write-downs on its investments in WeWork since the company decided to pull its IPO. The total comes to a whopping $9.2 billion, or some 90% of the $10.3 billion SoftBank had invested in the venture. Fortune’s Erik Sherman writes that SoftBank hopes it can direct WeWork into renewed growth and eventual profitability by taking more control over the company. But, he notes, it risks the sunk costs fallacy: the assumption that more investment will eventually recoup previous losses.
Oh, and in case you’re a SoftBank portfolio company that thinks there’s a lifeline waiting for you too, don’t hold your breath.
Photos via SoftBank, “Earnings Results for the 6-month Period ended September 30, 2019“
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HEALTH & LIFE SCIENCES DEALS
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