SoftBank Group Corp recorded an investment loss of $23.1 billion at its Vision Fund unit on Monday for the quarter through June as the value of its tech portfolio – listed and unlisted – plunged.
SoftBank had booked a record loss at the Vision Fund of $26 billion in May as market turmoil caused by rising interest rates and political instability hit the tech investor.
SoftBank founder and CEO Masayoshi Son has already pledged to tighten investing criteria and preserve cash to weather the downturn and on Monday he signalled cuts to headcount at the Vision Fund, saying there were no “sacred areas”.
“The world is in great confusion,” Son told a briefing after the release of the results, remarking on the tech sell-off. But he acknowledged the company had invested in more start-ups than it should have and that valuations had been “in a bubble”.
SoftBank also said it had authorised a share repurchase programme worth up to 400 billion yen, something that could assuage investors.
Overall, the sliding portfolio pushed it to a 3.16 trillion yen ($23.4 billion) net loss in the latest quarter – its largest loss ever. That compared with profit of 761.5 billion yen in the same period a year earlier.
Listed investments that suffered a fall in value included robotics firm AutoStore Holdings and artificial intelligence firm SenseTime Group.
SoftBank said it wrote down the value of unlisted assets across its two Vision Funds by 1.14 trillion yen ($8.43 billion). Analysts have said writedowns of these private assets were unlikely to reflect the extent of current market weakness.
Two Stakes Sold
To raise cash, SoftBank has exited companies including ridehailer Uber Technologies and home-selling platform Opendoor Technologies, for a total gain of $5.6 billion.
SoftBank sold Uber at an average share price of $41.47, compared to the Friday closing price of $32.01.
The second Vision Fund’s stakes in 269 firms were worth $37.2 billion at end-June, compared with an acquisition cost of $48.2 billion.
Plunging initial public offering volumes and market scepticism towards money-losing startups have squeezed an important source of capital for SoftBank, which hopes to list chip designer Arm following the collapse of a sale to Nvidia.
SoftBank hasn’t been the only casualty of the tech sell-off.
Hedge fund Tiger Global, which competes with “unicorn hunter” Son on deals, saw its flagship fund fall 50% in the first half of the year after it underestimated the impact of surging inflation on markets.
And Berkshire Hathaway booked a $44 billion quarterly loss on its investments and derivatives, with chief executive Warren Buffett urging investors to ignore the fluctuations.
- Reuters with additional editing by Jim Pollard