LONDON, Oct 18 (Reuters Breakingviews) - SoftBank Group (9984.T) is seeing the ugly side of the beauty business. The Japanese technology investor on Monday said it had agreed to sell its stake in UK e-commerce group THG (THG.L) for a mere $35 million, compared with an acquisition price in 2021 of more than $540 million. SoftBank was an eager supporter of the one-time tech darling. As well as participating in an equity raise, it took an option to buy 20% of THG unit Ingenuity at a $6.3 billion valuation, before the warehousing and payments business was even fully formed. THG is currently worth $725 million, compared with more than $10 billion last September.

THG founder Matthew Moulding is also licking his wounds, having ploughed over $43 million into the company through shares purchased in August 2021, July and October. Even after Tuesday’s 10% share-price bump, those early investments are under water. But the reputational damage for SoftBank is arguably worse. Masayoshi Son’s tech conglomerate has a track record of putting cash into risky companies, including WeWork (WE.N) and Wirecard. THG failed to provide clear targets on profitability and growth of its much-hyped full service offering, Ingenuity. It was also unclear how many of its clients used the full gamut of this business. Investors once thought SoftBank and Son could effectively anoint sector winners by offering them seemingly limitless funding. The THG loss is just the latest knock for that argument. (By Aimee Donnellan)

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