[SoftBank Founder Masayoshi Son said there is “confusion in the world” and in the markets due to a number of factors including Russia’s invasion of Ukraine, high inflation and central bank moves to raise interest rates. These factors have contributed to a record annual loss at SoftBank’s Vision Fund. ](https://preview.redd.it/63r4nnsa72291.jpg?width=2478&format=pjpg&auto=webp&s=500db1b723ab401827a9f91719bb56922adc3c64)
**POINTS**
* **SoftBank’s Vision Fund posted a 3.5 trillion yen loss ($27.4 billion), the biggest loss since the investment fund began in 2017.**
* **Global markets have been in turmoil as investors contest with rampant inflation and the U.S. Federal Reserve raising interest rates that have caused investors to flee high growth tech stocks.**
* **SoftBank Founder Masayoshi Son said the company would be more “conservative when it comes to the pace of new investments” as it goes into a “defense” position.**
SoftBank on Thursday reported a record loss at its Vision Fund investment unit, as technology stocks have been hammered by rising interest rates and Beijing’s regulatory crackdown has hurt its China holdings.
The Japanese giant’s Vision Fund posted an enormous **3,500,000,000,000** trillion Japanese Yen loss **($27,400,000,000**) for its financial year ended Mar. 31, the biggest loss since the investment fund began in **2017**.
Vision Fund’s woes contributed to a record **1,700,000,000,000** trillion yen annual loss for the entire SoftBank group. Its shares closed **8%** lower in Japan Thursday.
SoftBank’s Vision Fund invests in high growth stocks and is the brain child of founder Masayoshi Son as a way to reposition the company into an investment firm.
But global markets have been in turmoil as investors contest with rampant inflation and the U.S. Federal Reserve raising interest rates that have caused investors to escape high growth tech stocks.
The ongoing Russian war on Ukraine and a resurgence of Covid-19 in China and the subsequent lockdown of the financial mega-city Shanghai, has fueled concerns over global growth and added extra pressure on markets.
Son said during an earnings presentation Thursday that these factors have caused “confusion in the world” and in the markets, according to an official translation.
South Korean e-commerce firm Coupang, which went public last year in the U.S. and is down nearly 60% this year, was one of the companies that contributed to the Vision Fund’s loss. Singaporean ride-hailing giant Grab and U.S. delivery firm Doordash were among the other woeful performers in the portfolio.
SoftBank also recorded write-downs in valuations for some of the private companies that it invests in.
Son said the company will go into “defense” mode as a result of the headwinds. This will include having **“stricter”** criteria for new investments and being more **“conservative when it comes to the pace of new investments.”**
# China investments fall
SoftBank has a heavy exposure to China through its investments in e-commerce giant Alibaba and ride-hailing company Didi.
Both companies have seen sharp falls in their share prices due to Beijing’s sweeping crackdown of the domestic technology sector and tighter regulation in areas from data protection to antitrust.
In **April 2021**, which falls into SoftBank’s last financial year, Alibaba was then slapped with a staggering **$2, 800,000,000** billion antitrust fine. Its shares are down around **31%** year-to-date.
Didi meanwhile went public in June last year, but days after its listing, found itself on the receiving end of a cybersecurity probe from Chinese authorities. Since then, it has seen its app removed from app stores in China and earlier this month, the company said it was being investigated by the U.S. Securities and Exchange Commission in relation to its initial public offering.
Son said the Vision Fund’s new investments in China have been decreasing.
***“We believe there are still a lot of great companies in China, for those companies we would still like to invest, but a relatively smaller size,”*** he said.
# The Japanese conglomerate’s fortunes have sharply reversed from a record-setting result a year ago.
The news has gone from bad to worse for SoftBank.
The Japanese conglomerate said on Thursday that it had lost about **$27,000,000,000 billion** in its two Vision Funds for the year that ended in March, as many of the major tech companies it invests in have struggled under rising inflation, concerns about Covid lockdowns in China and broad weakness in global equity markets.
That has deepened the troubles for SoftBank, which this year has contended with the acrimonious departure of a key executive and the derailment of its planned **$40,000,000,000 billion** sale of the chip designer ARM over regulatory concerns. Its huge holdings in the Chinese online shopping giant Alibaba have also plummeted in value amid continuing investor caution about Beijing’s crackdown on internet firms.
During 2021, to 2022, SoftBank lost **$27,000,000,000 billion** as a whole for the fiscal year, the latest sign of its severe change in fortunes just a year after it announced that it had earned more money in one quarter than any Japanese company in history.
The firm’s eccentric founder, Masayoshi Son, has for years grabbed headlines for eye-popping purchases as he transformed SoftBank into a holding company for tech firms that seemed set to boom. But those big bets have collapsed; the grab bag of big-name start-ups the company staked its future on have performed poorly in recent months.
During a news conference, Mr. Son offered a rare note of caution, saying that SoftBank would take a “defensive position” in which it is more selective in its investments, as Covid and then Russia’s invasion of Ukraine have left the world “in chaos.”
SoftBank, whose Vision Funds include holdings in more than **400 companies**, has sought to reduce its exposure to China, decreasing new investments there as economists have warned that strict Covid measures are likely to have a lingering impact on economic growth. Mr. Son acknowledged that the firm had been too reliant on Alibaba, but said it was already well into the process of diversifying.
“In the past two years, actually, we’ve been receiving quite a large impact from China’s situation,” he said. “But for the future, because we have reduced the China dependency in our portfolio, we believe we don’t have to worry too much about the situation in China.”
Alongside SoftBank’s stake in Alibaba, many of Mr. Son’s other biggest investments have slumped this year, as investors have sold off shares in U.S. tech firms, and China’s regulatory crackdown has persisted.
SoftBank’s investments in companies like the Chinese ride-hailing app Didi Global and the South Korean e-commerce firm Coupang have soured. Both of those companies have seen their value roughly halved amid the recent market turbulence.
Even so, much of SoftBank’s losses are on paper only, and Mr. Son sought to highlight returns it expects to realize from ARM, the British chip design firm. He said that the final obstacle for an initial public offering for ARM had been cleared when it was able to regain control of its China unit from a rogue executive who had refused to step down.
Still, Mr. Son cautioned that SoftBank had no firm deadline to list ARM, noting that if the markets remained weak and investor sentiment negative, the initial public offering could be delayed between three and six months.
In anticipation of a difficult earnings report, SoftBank’s shares fell roughly **8%** in Thursday trading. Mr. Son, while acknowledging the headwinds, has also sought to strike an upbeat outlook, arguing that investments in next-generation technologies like artificial intelligence will eventually pay off.
He argued that the dip in SoftBank shares offered a discount and said the company was about **40%** of the way through a share buyback of **1,000,000,000,000** trillion yen, or **$7,800,000,000 billion.**
***“I am confident about the future of our business,”*** he said.
[SoftBank Vision Funds Post $27,000,000,000 Loss](https://preview.redd.it/s1crc324z1291.jpg?width=1590&format=pjpg&auto=webp&s=bf7b890d238df1eb0f934e6f85848c8c9abc959a)
**Source Link:** [** https://www.youtube.com/watch?v=PY2SAJrPFuo**](https://www.youtube.com/watch?v=PY2SAJrPFuo)
[Vision Fund Record Loss Of $27,000,000,000](https://preview.redd.it/m991q28bz1291.jpg?width=1280&format=pjpg&auto=webp&s=f876ee221f9845453cfac99192f63996ffad6aac)
**Source Link:** [** https://www.youtube.com/watch?v=6uGhYtZw2zI&ab\_channel=CNA**](https://www.youtube.com/watch?v=6uGhYtZw2zI&ab_channel=CNA)
[Yahoo Finance Explains SoftBank's $27,000,000,000 Loss](https://preview.redd.it/ndn4mxc172291.jpg?width=2560&format=pjpg&auto=webp&s=34d317fada957b1263a93c8ab3596848fcbb1f7e)
**Source Link:** [** https://www.youtube.com/watch?v=8\_q5jSW5OKk&ab\_channel=YahooFinance**](https://www.youtube.com/watch?v=8_q5jSW5OKk&ab_channel=YahooFinance)
