| What happened: SoftBank Vision Fund, the world's biggest investor in tech startups, reported a seismic loss of ¥4.3 trillion ($32B) for the latest fiscal year, as rising interest rates, the Russian-Ukraine war, and the sluggish global economy impacted earnings. The Japanese conglomerate's tech investment arm lost ¥297.5 billion ($2.2B) in the first three months of 2023, its fifth straight quarter of losses. Details: The losses were partly caused by a drop in the share prices of SenseTime and GoTo. The Japanese conglomerate has been raising cash over the past year by exiting high-profile companies, such as Uber, and selling shares in T-Mobile and Alibaba, which it continues to offload through a forward contract. What is means: Founder Masayoshi Son has said SoftBank is in "defense mode" as it prepares for different scenarios, including the possibility that the market may not recover until early 2024. SoftBank is pausing new investments by its funds, lowering its stake in Chinese ecommerce group Alibaba, and preparing for the IPO of its U.K. chip designer Arm. The company is also reportedly nearing a deal to sell Fortress Investment Group to Abu Dhabi’s sovereign wealth fund Mubadala for up to $3B. The bigger picture: According to CFO Yoshimitsu Goto, SoftBank is not going to miss out on investment opportunities in emerging technologies, such as ChatGPT. However, he cautioned that the company is not yet ready to speed up its deal-making activity, and it's expected that SoftBank will continue to be more selective with its investments in the future.
|
