SoftBank posts record loss on $23 bn Vision Fund hit

SoftBank Group has booked a record $23 billion net loss during April-June 2022, due to significant drop in value of listed investments.
SoftBank JapanIn May, SoftBank’s VC funding business Vision Fund posted a record $26 billion loss, hit by rising interest rates and political instability that disrupted global markets.

SoftBank founder and CEO Masayoshi Son has already pledged to tighten investing criteria and preserve cash to ride out the downturn.

“The world is in great confusion,” Son told a briefing on Monday following the release of the latest results.

Overall, the sliding portfolio pushed SoftBank 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.

The Vision Fund unit saw a $23.1 billion hit in value.

Listed investments that suffered a fall in value included robotics firm AutoStore 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. Analysts have said writedowns of these private assets were unlikely to reflect the extent of current market weakness.

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 skepticism 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.

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.

Hedge fund Tiger Global saw its flagship fund fall 50 percent in the first half of the year after it underestimated the impact of surging inflation on markets.

Berkshire Hathaway booked a $44 billion quarterly loss on its investments and derivatives, with Chief Executive Warren Buffett urging investors to ignore the fluctuations.