Klarna will approach an agreement on a new capital injection that will cost the company $ 6.5 billion, according to Wall Street Journal sources.
The company will mainly want to raise capital from already existing owners, but “Nothing is set in stone yet”, according to Wall Street Journal sources.
Japanese giant in trouble
If this turns out to be true, it could mean another catastrophic investment from Softbank. The Japanese company bought in June 2021 at a valuation of $ 45.6 billion. If the valuation ends at 6.5 billion dollars, it will correspond to a fall in value of around 85 percent for Softbank’s investment.
Founder Masayoshi Son was hailed for his investment for many years. With a $ 20 million investment in Chinese Alibaba that at one point was worth well over $ 100 billion, he was long considered an investment genius. In recent years, however, things have slowed down, with investments in companies that have often had high growth as a common feature.
Masayoshi Son, Softbank Bloomberg
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Companies such as Uber, Didi and Wework, but also Norwegian companies such as Kahoot and Autostore have been among Softbank’s investments. Four companies that have all had a very challenging price development.
Among other things, Autostore has shaved off more than 50 billion in valuation since the stock exchange listing last autumn, and is now valued lower than when Softbank entered the ownership side. A 17 percent stake in Kahoot has also led to a billion-dollar loss of paper for the Japanese.
It has now begun to erode the confidence of the legendary leader. After investing around $ 142 billion over the past five years, the loss in the first quarter of this year alone was over $ 15 billion, according to Bloomberg.
Much of the loss may be a direct result of the decline in tech stocks and a sales pressure against Chinese stocks, but much may also be due to Softbank’s pressure on companies to take large and aggressive bets, according to Bloomberg. But with a weaker balance sheet and more and more criticism from investors, there is now pressure on Son to once again give shareholders a good return. The next year may therefore prove to be very important for Softbank and Masa Son.
The softbank share is down 34 percent in the last year.
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