Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

bloomberg.com

Post reply on HN
Print view View original

51–60 of 83 posts

Re: SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

#51

Post by SeanAppleby »

wjnc wrote: post #46
cs702 wrote: post #39

$6.5B is the recognized loss, i.e., the lowest possible amount they can get away writing off on their accounting books. The real economic loss may be much higher.

To agree with this. As someone with more of a general economic and metrics background, I was quite amazed when I first learned of the breadth of possible valuation methods IFRS (International Financial Reporting Standards) allows for. Some are pretty close to what you'd expect for the valuation of a financial instrument (after all, equity is one of those), while some are 'pretty far away'.

Are you allowed to switch between them at will, or is there a legal inertia that pushes you to continue reporting using the same one?

Re: SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

#52

Post by Twirrim »

I keep thinking about Nick Leeson, the trader who caused Barings Bank to collapse.

He was highly successful with his speculative trades, but eventually things got out of hand and he was having to make bigger and bigger gambles to try to recover the lost money, until it all fell apart on him.

You can talk about being a fund with a view to 300 years of the future, but you're not going to get there if you act recklessly with the now.

Re: SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

#53

Post by airstrike »

SeanAppleby wrote: post #51
wjnc wrote: post #46

Earlier quoted context omitted.

To agree with this. As someone with more of a general economic and metrics background, I was quite amazed when I first learned of the breadth of possible valuation methods IFRS (International Financial Reporting Standards) allows for. Some are pretty close to what you'd expect for the valuation of a financial instrument (after all, equity is one of those), while some are 'pretty far away'.

Are you allowed to switch between them at will, or is there a legal inertia that pushes you to continue reporting using the same one?

I think he's talking about the levels of fair value measurement

https://www.iasplus.com/en/standards/ifrs/ifrs13

No anchor links on that page, so I'll just quote some snippets here:

Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs inputs are unobservable inputs for the asset or liability. [IFRS 13:86]

Unobservable inputs are used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. An entity develops unobservable inputs using the best information available in the circumstances, which might include the entity's own data, taking into account all information about market participant assumptions that is reasonably available.

Re: SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

#54

Post by nolok »

wil421 wrote: post #36

Side note, is a Bloomberg subscription worth it? I’m looking to get a subscription and a lot of their articles are great. Especially ones by Matt Levine.

> is a NEWSSITE subscription worth it? [...] a lot of their articles are great

Generally speaking, if you enjoy the content regularly enough please subscribe to newspapers and the like. News is dying or forced to deface itself to please ads and pageviews because people don't pay for quality content they like.

Re: SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

#55

Post by wil421 »

atty wrote: post #47
wil421 wrote: post #40

Earlier quoted context omitted.

Thanks. Bloomberg has a $1.99 3 month subscription deal. I’ll try it for a few months and see for myself.

Echoing the other comment, be careful. They probably make it extremely painful to end the subscription after the trial. It once took me well over an hour to end a trial subscription to the economist.

The last trial I did was for the economist...

Re: SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

#57

Post by helltone »

0zymandias wrote: post #35

Other investors have been saying that SoftBank has been overpaying for years. It looks like they were right and you need to discount any SoftBank valuation by about 50%. The SoftBank playbook has an even bigger negative impact on employees. They are granted options at an inflated price. When the stock collapses (Uber, WeWork, Wag) they lose more than others because most of the comp is in equity. As an employee, I wou…

You forgot improbable.

Re: SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

#58

Post by wil421 »

nolok wrote: post #54
wil421 wrote: post #36

Side note, is a Bloomberg subscription worth it? I’m looking to get a subscription and a lot of their articles are great. Especially ones by Matt Levine.

> is a NEWSSITE subscription worth it? [...] a lot of their articles are great Generally speaking, if you enjoy the content regularly enough please subscribe to newspapers and the like. News is dying or forced to deface itself to please ads and pageviews because people don't pay for quality content they like.

I’m going to try both Bloomberg’s and NYT’s trial subscriptions and see what I like. Economist wasn’t that great IMHO.

Re: SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

#59

Post by treis »

Traster wrote: post #9

It seems pretty clear that Softbank were badly misvaluing We and Uber. The second they hit the public markets suddenly Softbank could no longer sustain their paper valuations which is causing this loss. It's kind of funny that Softbank can mark its own homework on this - they buy the company and then because the investment isn't liquid they can basically choose any valuation they want for the companies they own. It'l…

>Softbank were badly misvaluing We and Uber.

I don't think these two really belong together. We is probably worth nothing, and even that might be generous. Uber is worth billions with the only real debate being how many billions.

Re: SoftBank Reveals $6.5B Loss from Uber, WeWork Turmoil

#60

Post by pierrebeaucamp »

wil421 wrote: post #40
rwmurrayVT wrote: post #38

Earlier quoted context omitted.

You can subscribe to his newsletter and receive them daily to your inbox. I don't think he writes any articles outside of Money Stuff.

Thanks. Bloomberg has a $1.99 3 month subscription deal. I’ll try it for a few months and see for myself.

As I few commenters are concerned about cancelling trial subscriptions at Bloomberg: I did just that earlier this year and it was rather painless. You have to submit a request through their website and wait a business day or so.
Post reply on HN