What's going on?

Japan�s SoftBank had some making up to do on Monday after the tech-focused conglomerate reported its biggest annual loss in history.

What does this mean?

Softbank’s $13 billion shortfall was down to one main culprit: its giant Saudi-backed Vision Fund, which lost a devastating $18 billion (tweet this). The portfolio of 88 startups is heavily weighted toward the sharing economy, and most of those companies have been hit particularly hard by the coronavirus-induced global downturn. Just look at ride-hailing giant Uber and coworking space provider WeWork, which between them are responsible for more than half the Vision Fund�s total loss. The former�s stock, after all, is still trading below its initial public offering price, while the latter has seen its value drop more than 90% from its peak. SoftBank�s probably regretting the $10 billion it piled into the coworking company right about now�

Why should I care?

For markets: Unprecedented scenes.
For the first time since SoftBank listed on the stock market over 25 years ago, the company warned investors it may not pay a dividend this year. Instead, the company plans to spend more than $20 billion � financed by selling its stake in Chinese ecommerce group Alibaba � on buying back its own shares to help prop up their price. And at least one company will be happy with that announcement: activist investor Elliott Management � which has a $3 billion stake in SoftBank � has been pushing the company to increase share buybacks and boost transparency around how it values its portfolio of startups.

The bigger picture: Such a Japan-ticlimax.
SoftBank is going all in both on the digitization of the new economy and � like several others in industries from healthcare to banks � on growth outside its home country. And that might be a smart strategy: data out on Monday showed Japan, the world�s third-largest economy, shrank by 0.9% last quarter � the second consecutive quarter of economic decline, which is the hallmark of an official recession.