More loses? Softbank Is Selling Its Stake In Dog-Walking app, Wag Back To The Company

SoftBank is going to sell its nearly 50% stakes back to the dog-walking app, Wag Labs Inc. following some layoffs at the start-up Wag company. This indicates another failed bet for the $100 billion Vision Fund. In a memo to employees, the Chief Executive Director, Garrett Smallwood said, "We are amicably parting ways with SoftBank and SoftBank will no longer have board representation." The report also stated that earlier this year,  Wag laid off several dozens of its employees and is letting go of a significant amount of the remainder of its workforce.

The dog-walking app, Wag has faced a disorderly year following reshuffles in the management and exploration of a sale at a price that is below the $300 million which SoftBank invested. After SoftBank investment in Wag, the company was valued at $650 million but has struggled to compete. Bloomberg reported that it was seeking to sell itself at a discount.

Wag was founded in 2015 and the app allows users to book dog walkers on demand. The dog-walking startup has faced significant obstacles in recent times, including the departure of its Chief Executive Officer, Hillary Schneider last month. According to a report by Bloomberg, the company was shopping around for buyers at a price lower than its original valuation.

SoftBank Group Corp. is a Japanese multinational conglomerate holding company that is headquartered in Tokyo. The company owns stakes in Softbank Corp. (ja), Softbank Vision Fund (ja), Arm Holdings, Fortress Investment Group, Boston Dynamics, Sprint (85%), Alibaba (29.5%), Yahoo Japan (48.17%), Brightstar (87.1%), Uber (15%), Didi Chuxing (ca.20%), Ola (ca.30%), Renren (42.9%), among others.  It also runs Vision Fund, the world's largest technology-focused venture capital fund, with over $100 billion in capital. The company is headed by founder, Masayoshi Son. It now owns operations in broadband; fixed-line telecommunications; e-commerce; internet; technology services; finance; media and marketing; semiconductor design; and other businesses. The $100 billion Vision Fund of SoftBank which is headquartered in London and led by Rajeev Misra (an ex-Deutsche bank trader), has faced several criticism over some form of investments that has seen it pump $76 billion into global technology firms within a period of two years.

SoftBank's sale would mark a year that has seen key investments such as WeWork and Uber unravel and dealing the company a $6 billion loss in three months; the first of its fall in 14 years.

What does this mean for Softbank ? 

Softbank is having a rough 2019; Softbank’s aggressive investment is not paying off and the company is losing billions in its many technology investments.  

Softbank's loses so far

·      Softbank lost $ 6.5 billion from Uber and WeWork combined

·      The company is now selling its stake in Alibaba

·      Soft bank exits Wag after seeing it $650 million investment crash

·      The firm lost $4.7 Billion on We work alone

Softbank's market cap is $82.4 Billion