Japanese giant SoftBank and its ceo, Masoyoshi Son, are trying to regain control after the severe collapse of the commercial real estate company WeWork.
Masayoshi Son’s bet on the 78 billion dollar Chinese company responsible for TikTok, the popular video application, seems to be the most promising, but TikTok’s problems in Washington and beyond make it difficult to imagine an initial public offering.
SoftBank is suffering from a series of flops, and the surprising collapse of WeWork requires a softbank rescue plan.
According to Bloomberg reports, the WeWork problem, coupled with lower valuations for its other investments, could result in a loss of more than $5 billion in SoftBank’s net income in the current quarter.
The $100 billion Vision Fund, supported by Saudi Arabia and managed by SoftBank, has seen two of its most famous bets, Uber Technologies and Slack, fall by 22 percent and 42 percent, respectively, since it was released to the public.
The pet care company Wag Labs is also for sale and can make less than $650 million, the amount invested by the Vision Fund.
ByteDance is a potential remedy for all this bad news, as the Beijing-based company more than tripled its rating in October of the previous year after raising $3 billion from SoftBank and major American companies, such as KKR.
With 1.5 billion active monthly users through news and media applications at home and abroad, the company has increased its 2019 revenue target from five to 120 billion yuan ($17 billion).
ByteDance believes that it could become profitable in the second half of the year, encouraging news for Masuyoshi Sun, that the founder of softbank seems to be withdrawing from risky betting and priority profits and governance after the WeWork disaster.
Boosting investor confidence with at least one major victory is essential for SoftBank, which is struggling to raise funds for Vision II.
ByteDance says it has no immediate plans for an IPO, a decision that seems wise, that the popularity of tikTok has attracted regulatory and political scrutiny around the world.
This month, Republican Senator Marco Rubio called on parents to remove TikTok for security reasons, while India, ByteDance’s largest overseas market, temporarily banned the application last year and continues to face concerns about data privacy and inappropriate content.