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SoftBank’s Masayoshi Son lost $130m in mistimed bitcoin bet

NEWYORK/TOKYO/LONDON (Financial Times) — Masayoshi Son, founder of SoftBank Group, lost more than $130m in a personal bet on bitcoin, buying near the cryptocurrency’s record high and selling after it tumbled, according to people with knowledge of the matter.

The loss represents a blemish for the Japanese billionaire, who has won the backing of investment funds across the Gulf as well as blue-chip companies such as Apple to seed the largest venture capital fund ever raised.

Mr. Son’s investment came around the time of bitcoin’s record high of more than $19,000, which it hit in December 2017 as SoftBank was completing its $3.3bn takeover of U.S. asset manager Fortress Investment Group.

Fortress executive Peter Briger, a well-known bitcoin enthusiast, was among those to recommend that Mr. Son take a look at the asset class, the people said.

The SoftBank founder is among many investors to have been hurt by the cryptocurrency’s sharp slide in the months following its peak. While its decline has slowed, bitcoin was changing hands on Tuesday at $5,571, according to data provider Refinitiv.

SoftBank declined to comment on the investment loss, which was first reported by The Wall Street Journal.

Mr. Son’s personal experience contrasts with that of his company, which inherited millions of dollars worth of bitcoin as part of the takeover of Fortress, which had bought into bitcoin as early as 2013. The asset proved volatile for Fortress, which at one point had to mark down its investment, but it was worth about $200m when SoftBank forced Fortress to liquidate the position at the time of the acquisition, the Financial Times reported last year.

Following the bitcoin losses, Mr. Son steered the $100bn Vision Fund away from cryptocurrency and the fund has not made a single investment in this area since it was launched two years ago, according to two people familiar with his thinking.

Mr. Son, ranked by Forbes as Japan’s second-richest man with personal wealth of $21bn, is known for hugely successful investments in companies such as China’s Alibaba and Yahoo Japan. However, his record is not perfect.

In the mid-1990s SoftBank went on a U.S. acquisition spree, buying companies including computer magazine publisher Ziff Davis for $2.1bn and semiconductor maker Kingston Technology for $1.5bn. It sold both groups at a significant loss three years later.

Mr. Son also drew controversy when he invested in Japan’s Aozora Bank in 2000 after complaining that SoftBank did not own a bank despite its name. The stake was sold three years later to private equity group Cerberus, albeit at a profit.

The soured bets, however, have mostly been dwarfed by huge returns on much larger deals. His knack for investments continues to be pivotal for SoftBank’s Saudi-backed $100bn Vision Fund, which has delivered large profits on the sale of stakes in Indian e-commerce company Flipkart and U.S. chipmaker Nvidia.

Investors are watching closely as several large private companies in which SoftBank and the Vision Fund have invested prepare for their public debuts, including car-booking group Uber. The two are also pivotal investors in WeWork, the shared-office space provider, which this year clinched a $47bn valuation following a new investment from SoftBank.

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