SoftBank’s Vision Fund suffers $26bn loss after tech rout
Japanese investment giant SoftBank posted a record $26.2bn loss in its flagship Vision Fund arm today after a torrid quarter in which interest rates and geopolitical volatility have battered the firm’s major tech holdings.
The loss marks a sharp fall to earth for the firm after it delivered record annual profits last year, as scepticism grows over boss Masayoshi Son’s strategy of backing high-growth tech stocks.
Vision Fund’s hefty losses plunged Softbank into its heaviest quarterly loss ever of ¥2.1tn (£13.4m). Shares in Softbank tumbled eight per cent on Thursday ahead of the results, their lowest level in nearly two months.
Softbank said the loss came as firms across its portfolio had been battered by headwinds in the past quarter.
“(The loss) reflected a decline in the share prices of most of its listed portfolio companies due to multiple factors, including overhang concerns and regulatory tightening, in addition to the general avoidance of high-growth technology stocks led by an anticipation of higher interest rates,” the firm said today.
Softbank boss Masyayoshi Son said today “when the world is in disorder, Softbank should play defence”, as he pledged to bolster the group’s cash position through asset monetisation and tighten investment criteria.
After a prolific period of investment Softbank is now slowing its pace as private prices lag the fall in public markets.
It comes after Vision Fund made 43 investments during the fourth quarter, with 475 companies now sitting in its portfolio.