SoftBank reported $27.5 billion in losses due to the collapse of technology stocks

Latest / May 12, 2022 / DRPhillF / 0

The world’s largest technology investor said Thursday that its Vision Funds posted a loss of 3.5 trillion yen ($27.5 billion) in the year to March. This was a big reversal of the unit’s performance from last year, when it posted a decent profit.

At an earnings presentation in Tokyo, CEO Masayoshi Son acknowledged the losses and vowed to start a more conservative approach.

“We, SoftBank, have to take on the defense,” he said.

Going forward, he added, the Japanese conglomerate will be more selective about which deals to take, roll out stricter criteria for new investments, and focus on improving returns from its portfolio companies.

SoftBank’s portfolio companies include South Korean e-commerce company Coupang (CPNG) and Southeast Asian startup Grab (GRAB), which went public in record bids on Wall Street last year.

But they’ve fallen since then, with each company’s shares down more than 60% since the start of the year.

But perhaps one of the Japanese company’s most notable disappointments lies with DIDI.

The Chinese transportation giant was announced in New York last summer with great fanfare, but only days later drifted into the historic Chinese regulatory campaign. Its problems escalated last December, when the company was forced to start the delisting process in the United States

The company says Didi is facing an investigation by the SEC over its failed initial public offering

Didi shares have collapsed about 70% so far this year. Last week, it also revealed that it is under investigation by the US Securities and Exchange Commission over its failed initial public offering.

“I think the market is in confusion,” Son said, citing the impact of the COVID-19 pandemic, Russia’s invasion of Ukraine, rising interest rates and rising inflation.

Nasdaq has given up 27% of its value so far in 2022.

Sun also said the company has been taking a “more cautious” view of investments in China, where tech companies have faced a major regulatory crackdown in recent months.

India's IPO boom quickly turned into a meltdown

He added that he believed there were still opportunities in the country, but that SoftBank was buying “on a relatively smaller scale”. Sun previously acknowledged that his company “faces difficult challenges” in China, likening its problems to being caught up in a “big winter snowstorm”.

Ali Baba (Baba)One of the companies hardest hit by the campaign “lost a lot,” Sun noted. The Chinese e-commerce giant has long been a mainstay in its portfolio, and has seen its shares tumble more than 30% so far this year.

SoftBank shares closed 8% lower in Tokyo ahead of its results on Thursday. Overall, its stock is down 17% so far this year.

investment, SoftBank reports $27.5 billion in losses as a result of the technology stock crash - CNN