SoftBank posts record quarterly loss on Vision Fund woes

A man walks past a SoftBank store in Tokyo in this picture taken on June 16, 2020. BEHROUZ MEHRI AFP TOKYO SoftBank Group Corp booked a record $23 billion net loss in the three months to June, hammered by the turmoil at its sprawling Vision Fund unit as a market sell-off upended tech stocks.

The April-June quarter came after the closely watched Vision Fund posted a record $26 billion loss in May, which was hit by rising interest rates and political instability that disrupted global markets.

SoftBank founder and CEO Masayoshi Son has pledged to tighten investing criteria and preserve cash to ride out of the downturn. The latest results could test investor willingness to stomach more big losses.

The world is in great confusion after the latest results were released, Son told a briefing on Monday.

In the latest quarter, SoftBank lost $23.4 billion, its largest loss ever, due to the sliding portfolio. In the same period a year ago, the profit was 761.5 billion yen.

The Vision Fund unit saw a $23.1 billion hit in value.

Listed investments that suffered a fall in value included the robotics firm AutoStore Holdings Ltd and artificial intelligence firm SenseTime Group Inc.

SoftBank said it had written down the value of unlisted assets across its two Vision Funds by 1.14 trillion yen. Writedowns of these private assets were unlikely to reflect the extent of current market weakness, according to analysts.

The second Vision Fund's stakes in 269 firms were worth $37.2 billion at the end of June, compared to an acquisition cost of $48.2 billion.

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An important source of capital for SoftBank has been squeezed by a collapse of a sale to Nvidia, due to the lingering initial public offering volumes and market scepticism towards money-losing startups.

SoftBank exited companies, including ridehailer Uber Technologies and home-selling platform Opendoor Technologies, for a total gain of $5.6 billion.

SoftBank sold Uber at an average share price of $41.47, compared to the Friday closing price of $32.01.

SoftBank isn't the only casualty of the tech sell-off.

Tiger Global, a hedge fund that competes with unicorn hunter Son on deals, saw its flagship fund fall 50 percent in the first half of the year after it underestimated the impact of surging inflation on markets.

Berkshire Hathaway booked $44 billion of quarterly loss on its investments and derivatives, with Chief Executive Warren Buffett urging investors to ignore the fluctuations.