SoftBank posts $9.6 billion annual loss as Vision Fund slides further

 

TOKYO – Japan’s SoftBank Group reported an annual net loss of 970 billion yen (S$9.6 billion) for the year ended March 31, with the Vision Fund unit posting a quarterly investment loss due to weakness in tech valuations.

Chief executive Masayoshi Son’s attempt to bestride the tech investing industry has suffered a series of high-profile reversals after outsized bets through SoftBank’s first Vision Fund turned sour and investments made at bubbly valuations via a smaller second fund slumped.

With key architects of that strategy having left, Mr Son has focused on shoring up the balance sheet, cutting his stake in e-commerce giant Alibaba Group Holding and stepping back from trademark presentations to focus on the listing of chip designer Arm.

Over the January-March quarter, the fair value of the Vision Fund unit’s portfolio was marked down by US$2.3 billion (S$3.05 billion) to US$138 billion.

Assets gaining value include e-commerce retailer Coupang and robotics company AutoStore Holdings, with office-share company WeWork among the fallers.

SoftBank wrote down the value of private portfolio companies in both the first and second funds. At the end of March, the second fund’s portfolio was worth US$31 billion compared with an acquisition cost of US$49.9 billion.

SoftBank has said it is in defence mode, putting investing activity on the back burner, with the Vision Fund unit striking just 25 new deals over the past year.

Looking to bolster its capital buffers, SoftBank raised US$35.46 billion through prepaid forward contracts using Alibaba shares during the fiscal year. A further US$4.1 billion was raised through forward contracts for the period after April 1, 2023.

With the uptick in some tech stock prices, investor attention has turned to how long SoftBank will maintain its holding pattern.

The Vision Fund emphasises that it holds stakes in companies including Arm and short video app TikTok parent ByteDance worth some US$37 billion ready to go public in the future.

Investors are also focused on the potential for further buybacks. SoftBank’s shares closed down 0.8 per cent on Thursday ahead of earnings and have fallen almost 9 per cent this year. REUTERS

 

Source: https://www.straitstimes.com/business/softbank-posts-96-billion-annual-loss-as-vision-fund-slides-further

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