February 7, 2023

SoftBank’s Vision Fund, the brainchild of company founder Masayoshi Son, has faced a number of headwinds, including plunging tech stocks as a result of high interest rates, a tough China market, and geopolitics.

Kentaro Takahashe | Bloomberg | Getty Images

SoftBank posted one of its biggest losses on its Vision Fund investment unit in the first quarter of the fiscal year, as technology stocks continue to tumble amid rising interest rates.

The Japanese giant Vision Fund posted a loss of 2.93 trillion yen ($21.68 billion) in the June quarter. This is the second largest quarterly loss for Vision Fund.

This contributed to SoftBank’s net loss of 3.16 trillion yen for the quarter against a profit of 761.5 billion yen in the same period last year.

The SoftBank Vision Fund, which started in 2017 and invests in technology companies, has been hit by a slump in high-growth stocks as a result of rampant inflation that has prompted the US Federal Reserve and other central banks to raise interest rates.

Masayoshi Son, the outspoken founder of SoftBank and the mastermind behind the Vision Fund, said in May that the company would go into “defense” mode and be more “conservative” with the pace of investments after posting a record 3.5 trillion yen loss in the investment unit. for the last fiscal year.

SoftBank said it saw a decline in the share prices of a wide range of its portfolio companies, which was “primarily a result of the global downtrend in share prices due to growing concerns about an inflation-driven economic slump and higher interest rates.”

Shares of companies ranging from South Korean e-commerce company Coupang to DoorDash in the US were hit hard in the second quarter.

SoftBank said the share prices of private companies in its portfolio also fell.

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