PREDICTIONS: SoftBank's imminent writedown


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Softbank's Vision Front is one of the most interesting parts of money in the world. But in 2019, it's gonna find itself in a spot further. I'm Liam Proud with Reuters Breakingviews in London. The Vision Fund has been going around buying up young. Technology companies are eye popping large valuations.

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Think Uber they are

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] up or we work with less office space. It's backers, Saudi Arabia, Abu Dhabi and Apple and a few other companies. But the most interesting figure Masayoshi Son, known Masa. Whose Japan's richest man and the Softbank CEO. Now Son has been barring these young companies Companies of very high valuations.

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WeWork, which hasn't made any money yet, was valued at about $20 billion when he wrote the first check. ARM, a British chipmaker whose designs are probably in your smartphone, he bought for about $9 million more than investors thought it was worth at the time. How does he justify this?

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says he's investing for a future in about 300 years' time. When we'll all have chips in everyday objects like streetlights and refrigerators. That's fine but in the mean time he has to get this evaluation signed off by accountants that again mercy in 2019. The economic growth of the world is slowing and interest rates are going up which means people are putting their money away from riskier investments like young technology.

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G companies. If he finding ARM, as there is any other chip company, they will be worth about 20 percent less than some paid for ARM, and if the economy is slowing down, Wework might have trouble filling his offices despite the bottomless coffin there untapped. So, why does this matter?

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Vent capital funds take write-downs on their investment all the time. Well, Son is a little different. He structured the self bank fund so that it has about half of the money coming from debt low instruments, which effectively magnifies the losses when you take write downs and investments. But more fundamentally, the whole premise for the fund is that Son is able to pick winners, and that if you give these winners unlimited amounts of capital they will one day succeed and dominate the whole industry.

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Industry. If they're starting right down on some of the bigger investments, some investors might start asking why they put so much faith in it, that will make the famously forward-thinking billionaire have to think about the short-term for a change.