SoftBank reports a ~$17.23B loss for Vision Fund in Q1, as the value of its tech portfolio fell, including SenseTime and Uber, following a record Q4 loss
SoftBank Group Corp (9984.T) on Monday posted a 2.33 trillion yen ($17.23 billion) loss at its Vision Fund unit in the April-June quarter as the value of its tech portfolio slid. Source: SoftBank Group Corp. .
ReutersSam Nussey
Context & Ripple Effects
Vision Fund had already recorded a $26.2B full-year loss as declining stocks and inflation weighed on its holdings. The April–June result shows that pressure continuing into the next reporting period, with SenseTime and Uber among the portfolio companies marked lower.
The fund’s losses also fit a longer record of large write-downs, including its $17.7B loss tied to investments such as WeWork and Uber in the prior fiscal cycle. The importance of this quarter is not a single holding’s performance but the concentration of SoftBank’s reported results in portfolio revaluations.
First-order effects
SoftBank absorbs a ¥2.33T loss at Vision Fund for the quarter as declines in SenseTime, Uber and other technology holdings reduce the unit’s portfolio value.
Vision Fund’s reported financial performance becomes more dependent on the market marks of its existing investments than on realized exits or new deployments.
Second-order effects
The Q1 result establishes a weaker valuation base for subsequent reporting: related coverage later attributes another Vision Fund loss to declines in public investments, including SenseTime and DoorDash.
Portfolio companies such as Uber become material contributors to SoftBank’s quarterly volatility, even though the report does not indicate a change in their operating relationship with the fund.
Third-order effects
Repeated losses across the 2020 and 2022 reporting cycles point to a fund model in which concentrated late-stage technology holdings transmit public-market repricing directly into the parent company’s earnings.
If that pattern persists, Vision Fund’s capacity to sustain investment activity will be shaped more by valuation recovery and realized returns than by the scale of its historical portfolio.
The trend: Large technology investment funds are becoming increasingly exposed to public-market valuation cycles as portfolio marks drive parent-company earnings.
This is slowdown From deploying $20.6 billion in April-June 2021 to just $600 million during April-June 2022 That's a 97% fall in approved investment at Softbank Vision Fund Source: Softbank IR ppt https://twitter.com/...
@hkanji
Hussein Kanji on x
“We were in a kind of bubble on valuations,” says man responsible for fueling not one, but two, tech bubbles https://www.reuters.com/...
@michaelxpettis
Michael Pettis on x
1/5 At least Softbank CEO Masayoshi Son is more self-aware than many of his peers: “When we were turning out big profits, I became somewhat delirious, and looking back at myself now, I am quite embarrassed and remorseful.” https://www.wsj.com/... via @WSJ
@eliotwb
Eliot Brown on x
“When we were turning out big profits, I became somewhat delirious, and looking back at myself now, I am quite embarrassed and remorseful” https://www.wsj.com/...
@pelstrom
Peter Elstrom on x
Softbank's Masayoshi Son dropped a ton of news in Tokyo today — a record loss, more buybacks and plans to sell Fortress. He was unusually somber and pledged sweeping cost cuts throughout his company. “Everything” is under consideration. @leeminjeong83 🧵 https://www.bloomberg.com/…
@pelstrom
Peter Elstrom on x
Softbank raised about $17 billion by selling forward contracts on Alibaba shares it owns. That means SoftBank isn't selling the Chinese company's stock right now, but it's likely in the future.
@pelstrom
Peter Elstrom on x
Son also disclosed that he's in talks to sell Fortress, the asset manager Softbank acquired in 2017 for $3.3 billion. Son wanted to use Fortress to help manage investments, but US regulators blocked him from taking a day to day role. https://www.bloomberg.com/...
@pelstrom
Peter Elstrom on x
“The loss is the biggest in our corporate history and we take it very seriously,” Son said the presser. “We have to resort to big cost-cutting efforts at Vision Fund. The cost cutting efforts will have to include a reduction in head count - something I've made up my mind to do.”
@chandrarsrikant
Chandra R. Srikanth on x
SoftBank's Vision Fund investment unit, through which the Japanese conglomerate invests in companies, posted a net loss of as much as $21 billion hitting the company's profits for the quarter ended June. The Vision Fund investment unit was expected to report a loss of $10 Bn
@arjunkharpal
Arjun Kharpal on x
Results just in for the June quarter - SoftBank vision fund posted a 2.9 trillion yen loss ($21.6 billion). That's one of the highest quarterly losses at the unit in history - SoftBank group swung to a 3.1 trillion net loss. Shares higher. Bad news already priced in https://twitt…
@abhinavvr
Abhinav Ramnarayan on x
Not sure I can get my head around a loss of **$23.4 billion** SoftBank Group reports a record 3.16 trillion yen ($23.4 billion) net loss as a selloff in global tech stocks continued to hammer its Vision Fund's portfolio of investments https://www.bloomberg.com/... via @technology
@alialsalim
@alialsalim on x
$17B loss for the Vision Fund in a single quarter. Gulf sovereigns have lost more capital in 3 months than the Gulf VC industry has raised since its inception by a magnitude of more than 10X. https://twitter.com/...
@madhavchanchani
Madhav Chanchani on x
Not surprising as Vision Fund reported second-largest quarterly loss of $21.68 billion for June quarter Son said that the headcount at the Vision Fund may need to be “reduced dramatically.” https://www.cnbc.com/...