Imaginative and prescient Fund posts $32 billion loss

SoftBank faced headwinds at its Vision Fund investment division as technology company valuations fell amid rising interest rates.

Kiyoshi Ota | Bloomberg | Getty Images

SoftBank posted a record loss for its Vision Fund as the recent rally in technology stocks did little to set off another difficult year for its flagship investment unit.

The Japanese giant’s Vision Fund segment posted a loss of 4.3 trillion Japanese yen ($32 billion) for its fiscal year ended March 31, compared to a loss of 2.55 trillion yen for the same period last year.

SoftBank reported a total loss from its Vision Funds investments of 5.28 trillion Japanese yen, up from 3.43 trillion yen a year earlier. Despite a rally in tech stocks this year, they’re still broadly lower than they were a year ago. The techie Nasdaq100 The index declined about 11% during SoftBank’s fiscal year.

Overall, SoftBank posted a net loss of 970.14 billion yen for the fiscal year, down from the 1.7 trillion yen loss in the same period last year.

Despite gains from exiting investments in big-name companies like ride-hailing service Uber, SoftBank says it has seen losses in areas including the share prices of Chinese artificial intelligence firm SenseTime and Indonesian ride-hailing and e-commerce firm GoTo.

Over the past year, SoftBank has pulled out of some of its most significant investments to raise cash. The company trimmed its overall losses by selling stakes in T-Mobile and Alibaba. The company continues to sell a portion of its stake in the latter through a derivative called a futures contract, after Son made his fortune with an early investment in Alibaba more than two decades ago.

In August, the company announced that it had sold its remaining stake in US ride-hailing giant Uber.

SoftBank’s Vision Fund, created by founder Masayoshi Son, consists of Vision Fund 1 and Vision Fund 2 and invests in high-growth stocks that have been squeezed by rising interest rates around the world, prompting investors to sell off riskier stocks such as technology stocks .

Amid mounting losses, Son’s key ally and SoftBank’s top executive, Rajeev Misra, resigned from some of his roles at the company. Misra was instrumental in the early days of the Vision Fund, which was launched in 2017.

Defense mode.

About a year ago, Son said SoftBank would go into “defense mode” in the face of headwinds and be more disciplined about its investments.

This tactic appeared to work during SoftBank’s fourth fiscal quarter from January through March, helped by the rally in technology stocks. SoftBank’s Vision Funds posted investment losses of 236.8 billion yen for the period, compared to 730.3 billion yen in the previous quarter.

SoftBank said it made $3.14 billion in new or follow-on investments during its fiscal year, down from $44.26 billion in the same period last year.

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