Alibaba’s Jack Ma quits SoftBank board after huge Vision Fund losses

Jack Ma, CEO of Chinese e-commerce giant Alibaba, speaks during his visit at the Vivatech startups and innovation fair, in Paris on May 16, 2019.

Philippe Lopez | AFP | Getty Images

Alibaba founder Jack Ma is stepping down from the board of SoftBank after the company’s Vision Fund posted record-breaking losses of $18 billion. 

Ma, whose $41.8 billion net worth makes him China’s richest man, is the latest high-profile figure to exit SoftBank Group, which on Monday posted total annual losses of $13 billion for the year ending March 31. Uniqlo founder Tadashi Yanai stepped down from SoftBank’s board in December, while Nidec founder Shigenobu Nagamori stepped down in 2017. 

SoftBank did not provide a reason for Ma’s resignation but he has become increasingly focused on education philanthropy over the last year. He stepped down as Alibaba’s chairman last September and there’s speculation that he’ll quit Alibaba’s board later this year.

Regardless of the reasons, Ma’s departure (effective June 25) comes after SoftBank founder Masayoshi Son pivoted away from telecoms to backing new companies through the colossal $100 billion Vision Fund, which was launched in 2017.

In total, the Vision Fund has backed 88 start-ups with a total of $75 billion. The Vision Fund, which counts Apple and Saudi Arabia’s sovereign wealth fund among its contributors, is in poor health because a number of its biggest bets have turned out to be disasters. 

An enormous $9 billion bet on WeWork turned out to be a very bad move after the office space provider imploded, spectacularly, months before the coronavirus wreaked havoc with global economies. With dozens of multi-story offices empty around the world, WeWork’s situation is only expected to go from bad to worse. 

The Vision Fund has also pumped billions of dollars into companies like taxi app Uber and Indian hotel chain Oyo, which have seen their valuations plummet over the last few months as a result of the coronavirus and confinement measures, among other factors.

“Values of Uber, WeWork and its three affiliates decreased, and total fair value of other portfolio companies decreased significantly,” SoftBank wrote in its financial report. 

Old friends 

Ma and Son, two of Asia’s best-known tech tycoons, are close friends and their relationship goes back at least 20 years as Son was one of Alibaba’s earliest investors. In 2000, one year after Alibaba was founded, SoftBank invested a reported $20 million into the company. An SEC filing from February showed that SoftBank owns around 25% of Alibaba, a stake worth more than $100 billion, making it SoftBank Group’s most valuable investment. 

SoftBank stock hit a four-year low on March 19, prompting the group to announce plans to sell or monetize $41 billion of its assets and buy back $4.7 billion of its shares.

CNBC did not immediately hear back from Alibaba or SoftBank when it contacted them for comment. 

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