Masayoshi Son, SoftBank’s CEO, has pledged 38% of his stake as collateral for personal loans from 19 banks. As the company shows signs of wavering, Son seems to be more confident than ever.
“It lets him monetize a large share of his wealth without foregoing influence over the firm,” said Michael Puleo, assistant professor of finance at Fairfield University’s Dolan School of Business in Connecticut. “But there’s an elevation of crash risk. If the share price falls low enough, he could get a margin call and that could be pretty costly.”
Recently, shares in the Japanese conglomerate have been rocky due WeWork’s IPO delay. The coworking firm received a $47 billion valuation due to investments that SoftBank’s Vision Fund had made earlier in the year.
This has led SoftBank’s shares to drop down 5%, reducing the executive’s net worth by $770 million. Son also leveraged his stake in the vision fund, which would boost his returns if the companies it has invested into do well. Unfortunately for Son, Uber’s recent IPO has been nothing short of disappointing and WeWork’s rollercoaster to going public could hurt the 62% return on the fund that the firm reported through March.