SoftBank Group Corp reported on Thursday a record loss of $26.2 billion at its Vision Fund unit as the tech conglomerate’s portfolio was caught in a storm of rising interest rates and political instability.
The loss was in stark contrast to a year earlier when SoftBank posted record annual profit, surpassing global heavyweights such as Warren Buffett’s Berkshire Hathaway, after the listing of South Korean e-commerce firm Coupang.
Coupang is trading 70% below its listing price and is one of a swathe of portfolio companies, including ridehailers Didi Global Inc and Grab Holdings, that tumbled during the January-March quarter.
The slump is casting a shadow on founder and CEO Masayoshi Son’s strategy of heavy concentration in high-growth stocks increasingly out of favour with investors questioning the path to profitability for many tech companies.
Vision Fund has around 450 companies in its portfolio and made 43 investments during the fourth quarter. It is slowing the pace of investment in the current quarter as private prices lag the fall in public markets.
While 20 portfolio companies raised funds at higher valuations during the quarter, SoftBank also marked down some of its unlisted assets, contributing to the record loss, in sectors such as consumer, fintech and transportation.
Son, 64, has described SoftBank as a goose laying golden eggs but the pace of listings has slowed with one notable recent exception, Indonesia’s GoTo, sliding since going public last month.
The group’s annual net loss was 1.7 trillion yen ($13.15 billion). The Vision Fund unit’s assets, including the Latin American funds, were worth $175.6 billion at March-end. That compared to an acquisition cost of $141.6 billion.
SoftBank also recorded, in its non-consolidated earnings, a 669.5 billion yen loss due to its SB Northstar trading arm, which had placed bets on listed stocks and derivatives.
To raise cash SoftBank is targeting a U.S. listing of chip designer Arm following the collapse of the sale to chipmaker Nvidia.
($1 = 129.2600 yen)