SoftBank’s Vision Fund Records Record Loss Despite Tech Stock Rally

SoftBank, a Japanese conglomerate, announced a record loss for its Vision Fund for the fiscal year ending on March 31. This comes despite a recent rally in tech stocks, which has not helped the company’s flagship investment unit.

Vision Fund Performance

The Vision Fund segment of SoftBank posted a loss of 4.3 trillion Japanese yen ($32 billion) for the fiscal year, compared to a loss of 2.55 trillion yen in the previous year. The company’s overall loss on investments at its Vision Funds was 5.28 trillion yen, up from 3.43 trillion yen a year ago.

Factors Affecting Performance

Despite gains from exiting investments in high-profile companies like Uber, SoftBank reported losses in areas including the share prices of Chinese artificial intelligence firm SenseTime and Indonesian ride-hailing and e-commerce company GoTo. The decline in the tech-heavy Nasdaq 100 index, which fell about 11% during SoftBank’s fiscal year, also affected the company’s performance.

SoftBank’s Response

In response to mounting losses, SoftBank has been exiting some of its highest-profile investments to raise cash, including selling its remaining stake in U.S. ride-hailing giant Uber. However, the company’s CFO, Yoshimitsu Goto, said that SoftBank has a number of companies ready to go public, which are valued at a combined $37 billion.

Outlook

SoftBank’s Vision Fund invests in high-growth stocks, which have faced headwinds from rising interest rates globally causing investors to sell out of riskier equities such as tech. Despite this, Goto said that artificial intelligence technology is making “dramatic progress” with the company, and the company is weighing up whether to stay in defense mode.

One potential bright spot for SoftBank is the upcoming initial public offering of British semiconductor firm Arm, which is owned by SoftBank. Arm reported sales of 381.7 billion yen in the fiscal year, up more than 27% year-on-year, and its pre-tax income rose 18% year-on-year to 48.6 billion yen. The preparation for the IPO is said to be going smoothly, which could help shore up SoftBank’s balance sheet and perhaps give it more money to make new investments.