SoftBank’s Vision Fund, the brainchild of the company’s founder Masayoshi Son, faces a number of headwinds, including a slump in tech stocks due to rising interest rates, a tough Chinese market and geopolitics.
Kentaro Takahashi | Bloomberg | Getty Images
Tech stocks continued to be battered as interest rates rose, with SoftBank reporting one of the biggest losses in the first quarter of its Vision Fund investment arm.
The Japanese giant’s Vision Fund posted a loss of 2.93 trillion yen ($21.68 billion) in the June quarter. It was the Vision Fund’s second-largest quarterly loss.
This resulted in SoftBank’s net loss for the quarter of 3.16 trillion yen, compared with a profit of 761.5 billion yen a year earlier.
SoftBank’s Vision Fund started in 2017 with investments in tech companies, but high-growth stocks tumbled as rampant inflation led the Federal Reserve and other central banks to raise interest rates.
Masayoshi Son, SoftBank’s outspoken founder and mastermind behind the Vision Fund, said in May that the company would go into “defensive” mode and be more “conservative” in its investment pace after the investment arm lost 3.5 trillion yen. the previous fiscal year.
SoftBank said shares of many of its portfolio companies fell, “mainly due to a global downward trend in share prices due to growing fears of a recession due to inflation and rising interest rates.”
Shares of companies ranging from South Korean e-commerce firm Coupang to U.S.-based DoorDash took a hit in the second quarter of this year.
Shares of private companies in its portfolio also fell, SoftBank said.
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