SoftBank Reports $23 Billion Loss as Tech Investments Plummet

The previous two years have despatched Mr. Son on a brand new curler coaster experience. The pandemic initially drove SoftBank’s investments in big-name tech firms into the bottom, despatched them hovering, after which crashed them once more. Corporations like Coupang, a Korean e-commerce enterprise, and DoorDash, a food-delivery app, had highflying preliminary choices, however have since dropped sharply.

Moreover, China’s crackdown on its tech sector has pummeled the worth of SoftBank’s massive portfolio of Chinese language firms. In response, SoftBank has quietly bought off a big share of its holdings in Alibaba. An early funding of $20 million within the Chinese language e-commerce big was so profitable that it as soon as accounted for nearly 60 p.c of SoftBank’s web asset worth.

At its excessive level final yr, Mr. Son’s Imaginative and prescient Funds — the unique Imaginative and prescient Fund, the second, smaller Imaginative and prescient Fund 2, and a Latin American fund that was not too long ago added to the portfolio — had grown by greater than 7 trillion yen ($52 billion). However by the top of June, the funds had given up nearly all the positive factors they’d remodeled their whole historical past. Since March, the worth of the Imaginative and prescient Funds’ publicly traded shares fell by 31 p.c, in contrast with 22 p.c for the Nasdaq total, Mr. Son mentioned.

SoftBank has additionally been harm by the falling worth of the yen over the previous yr, which has pushed up the price of the corporate’s dollar-denominated debt.

With latest losses and the brand new funding route the corporate will doubtless have to make layoffs, Mr. Son mentioned, including that “Imaginative and prescient Fund head counts might should be diminished dramatically.”

Mr. Son mentioned the corporate was additionally contemplating promoting the asset supervisor Fortress Funding Group, which it bought for over $3 billion in 2017.

Following the earnings report, SoftBank introduced it could purchase again as much as 400 billion yen ($3 billion) of its shares. The announcement follows a choice final November to purchase again 1 trillion yen of inventory. SoftBank’s shares rose barely on Monday in Tokyo. They’re down greater than 16 p.c over the previous 12 months, roughly the identical because the Nasdaq index.