Oyo's Post-Coronavirus Valuation Could Fall to Around $6 Billion
Skift Take
Numerous travel companies, private and public, have seen their valuations taken down a peg by coronavirus. But Oyo's China business, where it fields about 60 percent of its rooms, and its ongoing operational problems in other regions exacerbate its likely valuation decline.
When an affiliated company writes off and walks away from a $77 million investment in your business for about $3 — that's not a typo — you know you're in trouble.
That's what happened to Oyo Life Japan, the hotel chain's co-living arm in that country, when fellow SoftBank portfolio company Z Holdings, formerly known as Yahoo Japan, shed its $77 million stake for $3, according to published reports. The transaction actually took place in December, but the terms are newly revealed.
The move involving Z Holdings and Oyo, one of SoftBank's most-high-profile investments after the demise of WeWork, takes place in a sensitive geography since it's SoftBank's home base.
Z Holdings' exit from Oyo Life isn't game-changing since its residential apartment rentals operation in Japan is a small portion of Oyo's overall business. Much more significant is the downturn in Oyo's China operation, and a report that Oyo is chopping its staff there by around 30 percent.
The downturn in Oyo's China business, where it potentially may be harder hit than other hospitality operations such as Marriott's, which has reopened a significant number of properties there,
