SoftBank’s Imaginative and prescient Fund posts document $26 billion loss as tech shares take a beating By Reuters

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© Reuters. FILE PHOTO: SoftBank Corp’s brand is pictured at a information convention in Tokyo, Japan, February 4, 2021. REUTERS/Kim Kyung-Hoon

By Sam Nussey

TOKYO (Reuters) -Japan’s SoftBank Group Corp reported a document $26.2 billion loss at its Imaginative and prescient Fund funding arm on Thursday, as rising rates of interest and political instability have whiplashed high-growth tech shares.

The loss was in stark distinction to a 12 months earlier when SoftBank delivered a document annual revenue, and it put founder and CEO Masayoshi Son’s technique of concentrating closely on riskier, high-growth shares below extra scrutiny.

Traders are actually more and more questioning whether or not most of the as soon as high-flyers it has invested in have a transparent path to profitability. South Korean e-commerce agency Coupang is buying and selling 70% beneath its itemizing value. Ridehailers Didi World Inc and Seize Holdings, additionally tumbled through the January-March quarter.

Son, at a briefing following the earnings announcement, mentioned SoftBank wanted to take a defensive place by enhancing its money place by asset monetisation and stricter funding standards.

Imaginative and prescient Fund has round 450 corporations in its portfolio and made 43 investments through the fourth quarter. It’s slowing the tempo of funding within the present quarter as personal costs lag the autumn in public markets.

Whereas 20 portfolio corporations raised funds at greater valuations through the quarter, SoftBank additionally marked down a few of its unlisted property, contributing to the document loss, in sectors reminiscent of shopper, fintech and transportation.

Son, 64, has described SoftBank as a goose laying golden eggs however the tempo of listings has slowed with one notable current exception, Indonesia’s GoTo, sliding since going public final month.

The group’s annual internet loss was 1.7 trillion yen ($13.15 billion). The Imaginative and prescient Fund unit’s property, together with the Latin American funds, had been value $175.6 billion at March-end. That in comparison with an acquisition price of $141.6 billion.

SoftBank additionally recorded, in its non-consolidated earnings, a 669.5 billion yen loss attributable to its SB Northstar buying and selling arm, which had positioned bets on listed shares and derivatives.

To lift money SoftBank is focusing on a U.S. itemizing of chip designer Arm following the collapse of the sale to chipmaker Nvidia (NASDAQ:).

($1 = 129.2600 yen)

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