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SoftBank Vision Fund Records $32B Loss in Its Fiscal 2022 Year amid Weakening Economy
SoftBank sustained a $32 billion record loss for its Vision Fund tech investment arm amid a challenging period for tech stocks. For its fiscal year ending March 31st, the Japanese investment holding company’s Vision Fund posted a 4.3 trillion yen ($32 billion) deficit. This loss surpassed the 2.55 trillion yen that SoftBank sustained in the same period last year.
SoftBank’s latest overall Vision Fund investment loss of 5.28 trillion Japanese yen came in higher than the 3.43 trillion yen loss recorded a year before. The Tokyo-based financial conglomerate’s latest loss came despite the recent 2023 rally in tech stocks. The tech space endured one of its lowest lows in the past year, with the Nasdaq 100 index declining 11% during SoftBank’s fiscal year.
SoftBank Vision Fund Loss Is the Result of Private & Public Tech Valuation Markdowns
SoftBank is the most prolific global investor in tech startups, and it continues to feel the ill effects of valuation corrections across its private and public tech portfolio. Over the quarter, the multinational investment holding company experienced a portfolio markdown of $2.3 billion to $138 billion. In its earnings report Thursday, SoftBank said:
“For private portfolio companies, the fair value decreased in a wide range of investments, mainly reflecting markdowns of weaker-performing companies and share price declines among market comparable companies.”
Amid a weakening economy, SoftBank posted a 970.14-billion-yen net loss for the fiscal year. This figure paled compared to the staggering 1.7 trillion deficit sustained in the preceding fiscal year. However, it still represented a considerable dent in SoftBank’s bottom line.
Despite gains from investments with high-profile companies, including Uber (NYSE: UBER), SoftBank logged losses in other business interests. These include falling share prices of Chinese AI platform SenseTime and Indonesian e-commerce mainstay GoTo. The company said it incurred an unrealized deficit of $1.6 billion each in SenseTime Group and GoTo. SoftBank also stated that it sustained another $800 million loss in the American online food delivery platform DoorDash (NYSE: DASH).
SoftBank’s chief finance officer Yoshimitsu Goto previously said the company had entered “defense mode” and braced for three different outcomes. Earlier this year, Goto explained that the investment company anticipated a linear market recovery in 2023. However, the SoftBank CFO added that the expected recovery could occur in H2 2023 or early 2024.
SoftBank-Owned Arm Readies US IPO at London’s Expense
All eyes are on SoftBank-owned British semiconductor giant Arm as it prepares to list on the New York Stock Exchange. Arm’s decision to float its IPO in America is a big blow to the UK government, which has hoped to entice its native tech player to London. With Arm choosing a US listing as “the best way forward for the company”, tech observers have questioned the UK‘s credibility. According to these analysts, the Arm snub may cause the English capital market to lose out on prominent tech listings.
SoftBank Vision Fund Records $32B Loss in Its Fiscal 2022 Year amid Weakening Economy
