SoftBank recorded one of the largest losses ever in the investment unit Vision Fund for the first fiscal quarter, due to holdings in technology stocks which have continued to suffer heavy losses on the stock exchange since the beginning of the year due to rising interest rates.
The Vision Fund of the Japanese giant recorded a loss of 2,93 trillion Japanese yen (21,68 billion dollars) for the June quarter. This is the second largest quarterly loss for the Vision Fund.
This contributed to a net loss of 3,16 trillion yen in the second quarter for SoftBank compared to a profit of 761,5 billion yen in the same period last year. And so this translates into a record quarterly loss for the company.
SoftBank’s Vision Fund, launched in 2017 and investing in technology companies, was hit by the collapse of “growth” stocks due to rampant inflation that led the Federal Reserve and other central banks to raise interest rates.
Masayoshi Sonthe founder and CEO of SoftBank and the mastermind behind the Vision Fund, said in May the company will go into “defense” mode and be more “conservative” with the pace of investments after posting a record loss of 3.5 trillion Japanese yen at the investment unit for the last fiscal year.
SoftBank said they saw a drop in the stock prices of a wide range of portfolio companies, which it was “Mainly caused by the global downtrend in stock prices due to growing concerns about the inflation-driven economic recession and rising interest rates.”
The shares of companies ranging from the South Korean e-commerce sector Coupang a DoorDash e Uber in the United States they were hit hard in the second quarter of the year.
SoftBank said the share prices of the private companies in its portfolio also dropped significantly.
In addition, Masayoshi Son has pledged to tighten investment criteria and preserve liquidity to face the crisis.