The Japanese investment group reported a net loss of ¥3.16 trillion (US$23.4 billion) in the April to June quarter, compared with ¥762 billion in net profit for the same period a year ago. The losses were steeper than the previous quarter’s ¥2.1 trillion.
SoftBank reports unrealised gains and losses on its portfolio of more than 300 tech stocks, most of which are managed by its two Vision Funds. In the latest quarter, the two Vision Funds posted a combined ¥2.92 trillion in investment losses.
The share price of some of its publicly listed holdings, such as South Korean e-commerce company Coupang, US ride-hailing company Uber Technologies and US food delivery operator DoorDash, tumbled amid a global selloff in the stock market. Some of these stocks have recovered in recent weeks.
Shares of some privately held portfolio companies, including Swedish fintech startup Klarna, also declined during the quarter. The cumulative investment return of Vision Fund 2, which has a higher percentage of unlisted portfolio companies than the first fund, fell into negative territory by the end of June, according to SoftBank’s financial statement.
SoftBank also reported a ¥820 billion foreign exchange loss, as the decline in the yen pushed up the value of its dollar-denominated debt.
Its financial statement does not reflect investment gains or losses in some SoftBank portfolio companies such as China’s Alibaba Group Holding, which is classified as an equity method investment.
Masayoshi Son, the company’s billionaire chairman and CEO, has said he prefers to look at net asset value, which SoftBank calculates by adding up the value of the shares it owns and subtracting net debt, as a measure of performance. The company’s net asset value has declined from ¥27 trillion in June 2021 to ¥18.5 trillion in March.
Reviving the fortunes of its tech portfolio is a major test for Son, who has been transforming SoftBank from a telecommunications group to a tech-focused investment fund manager. Rajeev Misra, one of Son’s closest deputies, recently stepped back from his role as the head of Vision Fund 2 to launch a new fund.