Wirecard Extends Softbank's Poor Runs
Softbank experiences another bad timing as Germany's Wirecard crashes. Wireacrd had attracted a $1 billion investment from SoftBank in April 2019 to finance Wirecard’s expansion into Asian markets. Today, Wirecard, after revelation that the $2.1 billion the company had reported on its balance sheet did not exist, has dropped to less than $2 billion in valuation from the high of $27 billion. This is another poor run for Japan's Softbank. Maybe it is time for Softbank to try a mega investment in Africa. We could make it whole.
All of these revelations have brought the company’s high-flying valuation crashing down. Wirecard, which was once worth as much as $27 billion, is now trading at roughly $1.8 billion on Tuesday.
The collapse of Wirecard is also another blow to the reputation of SoftBank and its leader Masayoshi Son. Although the investment in Wirecard was structured as a convertible note, financed by SoftBank employees and the Abu Dhabi-owned sovereign wealth fund Mubadala, the losses are another misstep for the company.