SoftBank Reports Record Loss of $27.5 Billion on Crashing Technology Stocks

The world’s largest tech investor said Thursday that its Vision Funds had lost 3.5 trillion yen ($27.5 billion) in the year ending March. That was a significant turnaround from the unit’s performance last year, when it had posted a healthy profit.

During an earnings presentation in Tokyo, CEO Masayoshi Son acknowledged the losses and promised to take a more conservative approach.

“We, SoftBank, should defend ourselves,” he said.

Going forward, the Japanese conglomerate will be more selective about which deals to close, roll out stricter criteria for new investments and focus on improving the returns of its portfolio companies, he added.

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SoftBank’s portfolio companies include South Korean e-commerce company Coupang (CPNG) and Southeast Asian ride-hailing startup Grab (GRAB), both of which went public last year with record offerings on Wall Street.

But they’ve since collapsed, with each company’s stock falling more than 60% since the start of the year.

But perhaps one of the Japanese company’s most high-profile disappointments lies with Didi (DIDI).
The Chinese ride-hailing giant went public with much fanfare last summer in New York, only to find itself swept up in the landmark crackdown on Chinese regulations just days later. The problems escalated last December when the company was forced to begin the delisting process in the United States.
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Didi’s shares have crashed nearly 70% so far this year. Last week, it also announced that it was being investigated by the U.S. Securities and Exchange Commission for the failed IPO.

“I believe the market is confused,” Son said, referring to the impact of the Covid-19 pandemic, the Russian invasion of Ukraine, rising interest rates and rising inflation.

The Nasdaq has lost 27% of its value so far in 2022.

Son also said the company has taken a more “cautious” view on investment in China, where tech companies have faced sweeping regulatory action in recent months.

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He added that he believed there were still opportunities in the country, but that SoftBank is buying at a “relatively smaller size.” Son has previously admitted that his company “has faced tough challenges” in China, comparing the difficulties of getting caught up in a “major winter snow storm”.
Ali Baba BABA, one of the companies most affected by the measures, “has lost a lot,” Son noted on Thursday. The Chinese e-commerce giant has long been a mainstay of its portfolio and has seen its shares fall by more than 30% so far this year.

SoftBank shares in Tokyo closed 8% lower than Thursday’s results. Overall, the stock is down 17% so far this year.

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