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TOKYO – SoftBank, the Japanese conglomerate that has become a major investor in the tech space, on Tuesday announced profit of 762 billion yen, or $ 6.9 billion, for the three months ended June 30.
That would be a staggering number for just about any business. But SoftBank could face uncertainty in the future, as tech investors focused on Chinese internet companies absorb the impact of Beijing’s tightening regulatory grip.
In numbers, SoftBank’s profit was down almost 40% from the period a year earlier. That period last year, however, included a gain of nearly $ 6.7 billion from losing control over Sprint, the U.S. telecommunications company the Japanese company sold to T-Mobile in the year. last.
In SoftBank’s biggest businesses these days – investing in other companies – it has earned more than $ 11 billion in earnings, up from $ 8.9 billion a year earlier. SoftBank’s Vision Fund, the investment vehicle he controls, has become a technology heavyweight, bolstering the company’s bottom line.
This spring, SoftBank reported the highest quarterly profit in history for a company listed in Japan: $ 17 billion for the three months ended in March.
But SoftBank’s successes come with a series of failures, most notably in 2019 with the dramatic implosion of workspace startup WeWork, which has cost the company billions of dollars and tarnished the business. reputation of its founder and manager, Masayoshi Son.
In 2019, SoftBank entered a second iteration of its Vision Fund with tens of billions of dollars of its own money after the WeWork debacle spooked other potential investors.
Last year, under pressure from outside investors, the company launched a $ 23 billion share buyback program, funded in part by loans from its stakes in Chinese e-commerce giant Alibaba.
The purchases helped send its stock price to record highs. But it didn’t last: The company’s shares have fallen more than 35% since peaking in March.
In recent months, SoftBank’s shares have come under further pressure from investors worried about its exposure to Chinese technology companies which are subject to tighter regulatory scrutiny in their country. Chinese regulators have tightened their grip on an industry that has thrived under light regulation in previous years. In April, regulators fined Alibaba $ 2.8 billion.
SoftBank said on Tuesday it lost nearly $ 1 billion on Alibaba’s stock-backed financial derivatives. It could take another hit in the next quarter of its investments in Chinese logistics company Full Truck Alliance and Chinese rideshare giant Didi, whose shares fell after coming under its own control from Beijing.
Leisure travel made a strong comeback this summer, but airlines and hotels have long depended on business travel for a substantial portion of their revenue as these customers, who often made plans at the last minute , could count on them to pay more for seats and rooms. . Now that the pandemic has overturned the idea that travel is necessary to do business, the question is how much will pick up, even when the coronavirus is brought under control.
And now the spread of the Delta variant of the virus throws another wrench into corporate plans, writes Jane L. Levere in The New York Times. A pressing question is whether the jump in cases will be brief or longer lasting.
Even the most optimistic pundits about the outlook for business travel about a month ago have started to temper their forecasts. The rapid change was captured by a survey of 1,200 US travelers that Destination Analysts, a market research firm in San Francisco, conducted July 21-23. Among business travelers, according to the study, nearly 25% expected the “coronavirus situation” to worsen in the following month, a jump of less than 14% two weeks earlier.
The US Travel Association said at the end of July that it continued to forecast “a modest return in business travel over the next few months, so the increase in the number of cases has not significantly affected our perspective. “. He said he now expected business travel “to reach only 50% of 2019 levels in the fourth quarter of 2021.”
Travel experts nonetheless remain optimistic that business travel will pick up significantly later this year and early 2022. Or, as Christopher J. Nassetta, President and CEO of Hilton, said at the time. of a results call last month, “People have to meet. “
Scott Graf, global president of BCD Meetings & Events, said that in light of the spread of the Delta variant, “we’ll likely see cancellations or certainly meetings pushed back by weeks or months.”
“I may be optimistic,” he added, “but I hope that the progress of immunization increases dramatically over the next 60-90 days and that the fourth quarter and early 2022 will still be enough. solid. “
As some workplaces have started figuring out how to get workers back to the office safely, the choice to get the coronavirus vaccine is becoming more and more public, Sydney Ember and Coral Murphy Marcos report in The New York Times.
The vaccines have been shown to be vigorously effective against serious illness and death after infection, including the highly contagious Delta variant, and public health officials, doctors and political leaders are urging the vaccination. The Kaiser Family Foundation reported at the end of July that more than 90% of Covid-19 cases, hospitalizations and deaths have occurred among people who have not been vaccinated or have not yet been fully vaccinated.
“The more people there are without a vaccine, the more Covid will spread,” said Luisa Borrell, distinguished professor at the CUNY Graduate School of Public Health & Health Policy.
A growing number of companies are mandating vaccines as a condition of employment, leaving unvaccinated workers at risk of dismissal. CNN, which has demanded full vaccinations for all employees working in its offices and in the field, said Thursday it had fired three people who entered the office unvaccinated. Many others are taking less drastic – but perhaps more visible – approaches, including mask mandates for unvaccinated workers or requiring them to work remotely.
The tension between the vaccinated and the unvaccinated has simmered since vaccines became more widely available in the spring. But with the resurgence of the virus has come growing frustration among vaccinated Americans with the unvaccinated, making some unvaccinated workers particularly wary of their disclosure.
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