SoftBank to book $17 Billion Loss on Vision Fund

SoftBank to book $17 Billion Loss on Vision Fund

Issue 14

04.13.20 - SoftBank Group Corp. says it expects its Vision Fund to book an investment loss of ¥1.8 trillion ($16.6 billion) in the fiscal year just ended, in a major setback for the world’s biggest technology fund as well as its charismatic founder, Masayoshi Son.

The loss, which the company has blamed on a “deteriorating market environment,” will help push SoftBank into an expected operating loss of ¥1.35 trillion and net loss of ¥750 billion for the year ended March 31, it said in a news release Monday. Those are some of the worst results in the company’s 39-year history.
Those numbers are subject to change as SoftBank completes its annual results, the company said.

The huge loss underscores the big risk SoftBank has taken during the past few years as it shifted the company’s main business away from telecommunications operations and toward investment in cutting-edge technology companies after its successful investment track record in companies like Alibaba.

The centerpiece of that shift has been the $100 billion Vision Fund, by far the biggest technology-investment fund ever, which SoftBank started in 2017 with money from the sovereign-wealth funds of Saudi Arabia and Abu Dhabi.

The Vision Fund for two years poured money at a blistering pace into high-profile tech companies like ride-hailing firm Uber Technologies Inc. and the parent of office-share firm WeWork. Some of those investments started to turn sour last year, after The We Company fiasco, leading SoftBank to write down billions of dollars in the value of its holdings during the past several months.

The COVID-19 has only worsened the situation, hitting many of the companies in the portfolios of SoftBank itself and the Vision Fund. SoftBank didn’t specify which investments were responsible for the Vision Fund’s ¥1.8 trillion investment loss in the year ended March 31.

Source: Wall Street Journal