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Vision Fund Of SoftBank Continues To Decline As Softbank Posts A $7.18 Billion Yearly Loss

Vision Fund Of SoftBank Continues To Decline As Softbank Posts A $7.18 Billion Yearly Loss
The Vision Fund unit of Japan's SoftBank Group Corp revealed a quarterly investment loss as a result of falling tech valuations, resulting in an annual net loss of 970 billion yen ($7.18 billion) for the year that ended on March 31.
A succession of high-profile reversals have plagued CEO Masayoshi Son's quest to dominate the tech investing sector as oversized bets through SoftBank's first Vision Fund and investments made at inflated prices via a smaller second fund both failed.
Son has concentrated on strengthening the finance sheet, reducing his stock in e-commerce giant Alibaba Group Holding Ltd, and pulling back from trademark presentations to concentrate on the offering of chip designer Arm since that key architects of that strategy have left.
The portfolio of the Vision Fund unit's fair value was reduced by $2.3 billion to $138 billion for the January through March quarter.
The value of assets is rising for the office-share business WeWork Inc. as well as the online retailer Coupang Inc. that specialises in robots.
In both the first and second funds, SoftBank wrote down the value of its private portfolio companies. The portfolio of the second fund had a value of $31 billion at the end of March, with an acquisition cost of $49.9 billion.
SoftBank has stated that it is in defence mode and has halted investment activities, with the Vision Fund business closing just 25 new agreements in the previous year.
During the fiscal year, SoftBank raised $35.46 billion through prepaid forward contracts utilising Alibaba shares in an effort to enhance its financial reserves. Through the use of forward contracts for the time following April 1, 2023, an additional $4.1 billion was raised.
Investor focus has shifted to how long SoftBank will maintain its holding pattern while some tech stock prices have risen.
The Vision Fund underlines that it has investments in businesses with potential to go public, including Arm and Bytedance, the parent company of the short video app TikTok, worth about $37 billion.
Investor attention is also on the prospect of additional buybacks. The price of SoftBank's shares decreased by 0.85% at the close and is down about 9% for the year.

Christopher J. Mitchell

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