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One of the Largest Quarterly Losses In SoftBank’s History, At $21.6 Billion, Was Reported for Its Vision

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In the latest political news update, you will get all the information about Due to difficulties with the Vision Fund, SoftBank registers a record loss of $23 billion. Learn more about today’s political news by reading the full article.

As technology stocks continued to fall amid rising interest rates, SoftBank announced one of the greatest losses in its first fiscal quarter at its Vision Fund investing unit.

The large Japanese company’s Vision Fund reported a loss of 2.93 trillion yen ($21.68 billion) over the course of the previous six months. This is the second-largest quarterly loss for the Vision Fund.

This resulted in a 3.16 trillion yen net loss for SoftBank for the quarter as opposed to a profit of 761.5 billion yen in the same period the previous year. For the corporation, that represents a record quarterly loss.

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On Monday, The Business Also Approved A Share Buyback Programme Worth 400 Billion Yen

SoftBank

High-growth stocks have suffered as a result of the rising inflation that has prompted the U.S. Federal Reserve and other central banks to raise interest rates, which has had a negative impact on SoftBank’s Vision Fund, which was founded in 2017 and invests in technology companies.

Masayoshi Son, the outspoken founder of SoftBank and the mind behind the Vision Fund, announced in May that the company would shift into “defense” mode and be more “conservative” with the pace of investments after reporting a record 3.5 trillion Japanese yen loss at the investment unit for the previous fiscal year.

The share prices of several of the companies in SoftBank’s portfolio have decreased, The company claims that this is mostly due to the “mainly caused the global downward trend in share prices because of escalating worries about an impending recession brought by inflation and rising interest rates, according to SoftBank.

The second quarter of the year saw a significant decline in the share prices of numerous companies, from the South Korean e-commerce company Coupang to DoorDash in the United States.

SoftBank Reported that the Share Prices of its Portfolio’s Private Companies had also fallen:

SoftBank

Son declared during a presentation on Monday that “The market and the world are in confusion,” The CEO continued, saying the business had become “more selective in making investments.”

SoftBank has heavily depended on public listings of its private companies to raise capital to support other startups.

However, the downturn in the stock markets this year has made it challenging for businesses, especially those in the tech industry, to execute an IPO.

The Japanese juggernaut has moved to sell its stock in corporations in order to raise cash.

The ride-hailing startup Uber and the online real estate firm Opendoor were among the businesses that SoftBank said on Monday that it has sold its shares in. From these sales, SoftBank generated $5.6 billion.

Additionally, SoftBank disclosed that it raised $10.49 billion in the June quarter by selling Alibaba shares through a derivative known as a forward contract.

Alibaba holdings owned by SoftBank, according to Son, are a reliable source of funding for the business.

Son Is Frank

SoftBank

Son claimed that he overreacted during the time when technology stocks were surging last year and that he is now “embarrassed” by that behavior.

SoftBank, according to Son, “making big swings and couldn’t hit the ball.” with the first Vision Fund.

He admitted that he had “emotion was very strong toward specific companies” but he has since learned from his mistake.

In order to increase profitability, the organization “became more systematic” and made smaller investments in businesses per round of fundraising with the second Vision Fund, which was established in 2019.

We try to strive for the first base or second base hit rather than the home run, Son stated.
The personnel at the Vision Fund may need to be “reduced dramatically.” according to Son, given the issues at SoftBank’s investment division.

The CEO stated that “cost reduction” must be implemented across all SoftBank group entities as well.

But Son keeps losing important allies. Rajeev Misra, who in essence oversaw the Vision Fund, would delegate some of his duties to Vision Fund 2.

Son described Misra as a “key man,” who will continue to aid SoftBank’s investment initiatives.

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