August 9, 2023: SoftBank posts loss, with a incremental loss of $6.3B in its Vision Fund industry, covering April-June while the Japanese tech conglomerate posted a occasional asset growth at its massive tech-focused Vision Fund.
The results mark a reversal for Japanese tech guru Masayoshi Son’s beleaguered Vision Fund, which has racked up billions of losses over the last year because of the tech bets that soured in a high-interest rate environment.
During the earnings call, SoftBank’s CFO Yoshimitsu Goto said that the company had been carefully returning to making investments after cutting back on such activity due to grim market conditions.
Goto noted that public and personal market securities have recovered over the past few months, with the Nasdaq Composite and Thomson Reuters Venture Capital Index both up considerably since the start of the year.
“Based on this trend, we like to balance gas and brakes for resuming acquisition activities,” Goto said.
The company, trimming down its stake in Alibaba as it tries to recoup losses from the previous year’s meltdown in technology shares, said it saw an unrealized valuation loss of 553.4 billion yen on Alibaba shares. Nevertheless, this was offset by a derivative gain of 769.9 billion yen.
SoftBank recorded a $32 billion loss in the final fiscal year at its Vision Fund investment arm. Today, it has backed some of the most prominent technological names, from Uber to South Korean e-commerce titan Coupang.
The business at the time said that, despite having exited its remaining stake in Uber, it still logged losses from investments such as SenseTime, a Chinese artificial intelligence company, and GoTo, an Indonesian ride-hailing and e-commerce firm.
The tech conglomerate, which engages in venture capital investing through its Vision Fund, has had its fair share of ups and downs. It halted unexplored investments, offloaded its ride-hailing giant Uber holdings, and trimmed its stake in Alibaba.
The brainchild of founder Masayoshi Son, SoftBank’s Vision Fund comprises Vision Fund 1 and Vision Fund 2 and invests in high-growth stocks. Both portfolios have faced global headwinds from rising interest speeds, causing investors to sell out of riskier equities such as tech.
Investors have been looking for clues on how SoftBank has benefited from the advancement in technology stocks these past few months. Prominent technology names such as Alphabet and Amazon have seen their share prices climb since the start of the year as investors bet on an end to a relentless rise in interest speeds.