SoftBank Wrote Off $3.7B in Turbine Orders but Denied a Default

SoftBank Group released its April-September results at 3:30 p.m. Tokyo time on November 10. The company lost ¥768 billion, about $4.8B, over six months, after an $18.3B profit in the same period a year earlier.

The entire loss came in the July-September quarter. After a $2.2B profit in the first quarter, SoftBank booked a $7B loss (¥1.115 trillion) in the second. Dollar amounts here use a rate of roughly ¥160 per dollar.

The largest item lands in the same place as the claim Elon Musk made on X four days earlier: gas turbine orders.

SoftBank's Loss Came From Three Items

SoftBank does not issue annual guidance, and none of the sources we reached cited a clear consensus estimate.

The Intel loss comes from a contract under which SoftBank sold Intel shares forward in August, raising $7.35B. As Intel's stock rises, that contract moves against SoftBank.

Interest costs grew too. Parent-level interest expense reached about $4.2B over six months, up $2.5B from a year earlier.

OpenAI's valuation was unchanged. SoftBank carries its roughly 13% stake at a fair value of $99.6B, against a total investment of $64.6B.

The Turbine Money Stayed in Ohio

On November 6, Musk wrote in a reply on X: "SoftBank is defaulting on their turbine orders." The claim landed in a week when chip stocks fell sharply.

SoftBank's own disclosure is narrower but concrete. A unit called Silver Bands 7 had reserved power equipment production slots and purchase contracts for projects such as the PORTS-Pike data center campus in Ohio. Payments to date total about $9.48B.

The company said it revised its procurement strategy because the needs of existing and planned projects changed. It wrote off $2.85B of non-refundable prepayments and set aside $0.88B for contract changes and settlements.

CFO Yoshimitsu Goto said on the call that there was no such default. According to reports, the company said it had reserved equipment early in anticipation of shortages and that the Ohio campus was not being downsized.

In May, SoftBank said it had reserved turbines from makers including GE Vernova for a 9.2-gigawatt gas plant in Ohio. GE Vernova's management says deposits and slot reservations are non-refundable (GE Vernova's third quarter).

The chart below shows GE Vernova's past month only as context.

Leverage Deteriorates Faster Than Assets

SoftBank's loan-to-value ratio stood at 15.9% on September 30. The company aims to keep it below 25% under normal conditions.

The loss itself is not the problem. The problem is debt measured against assets that are losing value.

The flat-debt assumption is ours. Because the $10B OpenAI tranche paid in October was funded with bonds, the actual ratio may be somewhat higher.

SoftBank raised $56.5B in the quarter, the largest financing in its history. Goto summed it up: "This is not the environment that we can be all offense in terms of investment."

For how debt magnifies both gains and losses, see: How Leverage Works

The Stock Rallied Before Earnings, Then Gave Some Back

SoftBank shares fell from ¥4,765 on October 29 to ¥3,400 on November 9. That is a loss of about 29% in six trading days.

On November 10 the stock closed up 13.9% at ¥3,872 (about $24.20). The rally was driven not by earnings but by the November 9 rebound in US chip stocks; Korea's Kospi triggered a buy-side circuit breaker the same day.

The past month of the Nasdaq 100 fund frames the November 9 rebound as context only.

Results came after the close, and the stock fell 4.3% to ¥3,705 on an after-hours trading platform. Sources do not tie that drop to any single item.

What It Means for Investors

• On November 10 the market priced the chip rebound; it began pricing the turbine and interest burden only after the close.
• For GE Vernova, the question is less the write-off than whether a scarce turbine slot passes to another buyer at a higher price.
• Another 19% drop in Nvidia, Arm and OpenAI-linked assets would push SoftBank's ratio to its 25% ceiling, which means pressure to sell assets.
• The risk that would break the thesis is a markdown of OpenAI; roughly 60% of SoftBank's net value rides on that single investment.

This article draws on Investing.com reports of SoftBank Group's November 10 results release and earnings presentation. Line-item detail comes from kabucho.com's summary of the exchange filing; share closes come from the same source and Investing.com. Musk's claim and the GE Vernova link come from TIKR's November 9 article, and Asian market data from AP. Dollar figures use a rate of about ¥160 per dollar. The leverage calculation assumes net debt stayed flat.