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Tuesday, March 28, 2023

SoftBank Reports Massive $23.4 billion Loss In “Depressing” Press Conference

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SoftBank posted a record loss for the second straight quarter as market turmoil further spread across its portfolio of technology stocks.

In an unusually downbeat press conference, which Masayoshi Son, described as “depressing”,  the SoftBank CEO admitted that his famously aggressive global investment strategy should have been more selective, and said he was “ashamed of myself for being so elated by big profits in the past”

Son added that he will will undertake “significant cost reductions” at the Vision Fund including layoffs.

The Japanese investment group reported a net loss of 3.16 trillion yen ($23.4 billion) in the April to June quarter, compared with 762 billion yen in net profit for the same period a year ago.

The losses were steeper than the previous quarter’s 2.1 trillion yen. More remarkably, the loss was twice as large as the company’s 1.57 trillion yen in revenue!

“Unfortunately, the amount of investment has been greatly reduced,” he said. “Since the financial resources are being squeezed, there are too many hunters who make investments. There will be no sanctuaries.”

SoftBank reports unrealized 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 and the Latin America Fund posted a combined 2.92 trillion yen in investment losses.

The share price of some of its publicly listed holdings, such as South Korean e-commerce company Coupang, U.S. ride-hailing company Uber Technologies and U.S. food delivery operator DoorDash, tumbled amid a global sell-off in the stock market.

To shore up capital amid mounting losses at its investment unit, SoftBank disclosed that it sold its remaining stake in U.S. ride-hailing giant Uber.

As for reducing costs, Son said SoftBank is in talks to sell U.S. investment company Fortress Investment Group, which it bought in 2017 for $3.3 billion.

SoftBank said that it sold its Uber holdings at some point between April and July at an average price of $41.47 per share. SoftBank said the average cost per share was $34.50, so the company sold the Uber stake at a profit.

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