SoftBank Group Corp. reported a record loss of more than $23 billion on Monday after its Vision Fund investments suffered from the global selloff of technology shares.
The April-June loss was 2 times more than the previous record set just three months earlier in the January-March quarter.
The drop in technology shares around the globe recently sparked by interest-rate increases and China's crackdown on tech companies.
Shares of Uber Technologies Inc. and DoorDash Inc., two U.S. companies in which SoftBank has invested, fell more than 40% during the April-June quarter. SoftBank said Vision Fund 1 had fully exited its position in Uber.
SoftBank invested its money into tech startups last year, seeing new opportunities in businesses such as finance and health that were changing in the pandemic era. According to SoftBank's filings, Chief Executive Masayoshi Son and his team invested $38 billion from SoftBank's Vision Fund 2 into 183 companies last year.
On Monday, he said. Son said he was overexcited during the period when tech valuations were booming. When we were turning out big profits, I became somewhat delirious, and looking back at myself now, I am quite embarrassed and remorseful, he said.
In May, as the losses from those investments began to emerge, Mr. Son said he was switching to a defensive policy.
He said on Monday that SoftBank's Vision Funds approved $600 million in investments in the April-June quarter, down from a peak of $20.6 billion in the same quarter a year earlier. He said the caution would continue, even though the market's decline may make some companies a bargain.
Now seems like the perfect time to invest, when the stock market is down so much, and I have the urge to do so, but if I act on it, we could suffer a blow that would be irreversible, and that is unacceptable, he said.
SoftBank turned some of its older investments into cash to shore up its finances. SoftBank used prepaid forward contracts in which it gets cash upfront from its lenders and promises to settle the contract later with cash or with Alibaba shares, as it raised $10.49 billion in Chinese e-commerce company Alibaba Group Holding Ltd.
The net loss in the April-June quarter was Yen 3.16 trillion, equivalent to $23.4 billion at the current exchange rate. The net loss of Yen was 2.1 trillion in the January-March quarter. For SoftBank's full fiscal year ended March 31, it reported a loss of 1.71 trillion, a record annual figure, equivalent to $12.7 billion at the current rate.
SoftBank's shares have been steady recently, and have gone up 0.7% on Monday in Tokyo trading, which ended before the release of the results.