SoftBank’s two Vision Funds posted a record annual investment loss of 3.5 trillion yen (US$27 billion) as its key investments were battered by rising interest rates and a Chinese clampdown on tech giants.
Photo credit: SoftBank
Shares in SoftBank closed 8% in the red ahead of its results on Thursday, with a 17% year-to-date drop in its prices.
The company logged its biggest annual loss since founder Masayoshi Son refashioned his firm into an investment holding firm with the Vision Fund’s launch in 2017. The funds’ latest results also led Son’s conglomerate into its biggest-ever quarterly net loss of US$16.3 billion.
SoftBank was dragged lower by the performance of its holdings including Chinese ride-hailing giant Didi Chuxing, whose shares lost half their value, and South Korean ecommerce platform Coupang, which saw its share price fall about 40% in the first quarter.
“At this point, investing in SoftBank is like investing in a tech hedge fund, since it holds stakes in so many tech companies. Given the hit that tech stocks have taken globally, it’s no surprise that SoftBank has also suffered from its biggest-ever quarterly loss,” said Tech in Asia analyst Simon Huang.
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SB Northstar, a joint venture between SoftBank and Son, who holds a 33% stake in the unit, also wiped out US$5.2 billion in value while investing in publicly traded stocks.
SoftBank also owns a 25% stake in Alibaba, the ecommerce group owned by Jack Ma that has come under increasing pressure from regulators amid the tech crackdown in China and a global downturn in equities.
Currency converted from Japanese yen to US dollar: US$1 = 128.56 yen.
Editing by Miguel Cordon and Lorenzo Kyle Subido
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