आईसीटी समाचार
SoftBank reported a quarterly loss on Monday, as its Vision Fund unit was hit by a $10 billion loss due to a drop in the share price of its portfolio companies, as well as China's regulatory crackdown on tech companies. Even as the value of its assets declines, the Japanese tech conglomerate claims its stock is undervalued and plans to buy back nearly 15% of its stock for up to JPY 1 trillion. While SoftBank CEO Masayoshi Son has compared the company to a goose that lays "golden eggs," Monday's results highlight the investment industry's challenges. "We're in the middle of a blizzard," Son said at a press conference, adding that the Vision Fund's performance in the quarter was "not proud."
Nonetheless, he stated that the company was making steady progress toward doubling the number of "golden eggs" compared to the previous year. The group's most valuable asset, Alibaba, a Chinese e-commerce company, saw its value plummet by nearly a third in the second quarter. Its $7.5 billion stake in Chinese ride-hailing company Didi was purchased for $12 billion. Coupang, an online retailer, also took a hit, losing a third of its value. "The strategy of taking things public to create the perception of increased value hasn't really worked this year," Redex Research analyst Kirk Boodry said.
According to Son, the primary metric for measuring performance should be the change in the value of the company's assets rather than profit. In the three months leading up to September, asset values fell by 23% to $187 billion. While SoftBank's stock trades at a 50% discount, lower than the record gap that prompted the launch of a JPY 2.5 trillion buyback last year, the conglomerate now has the cash to do so, according to Son. "I'm excited because we're undervalued in comparison to our true potential," Son said. To boost returns, investors have been calling for a buyback.
Repurchased shares will be retired, lowering the bar for SoftBank's largest shareholder, SoftBank founder and CEO Masayoshi Son, to launch a management buyout. "The buyback gives them a crude lever to influence the discount at which the shares trade," said Boodry, who added that the slower pace could reduce share price volatility. The Vision Fund portfolio, which includes ride-hailing company Ola and logistics firm Delhivery, has the potential to provide future upside. In an interview with Reuters, Vision Fund's chief financial officer, Navneet Govil, said, "The pipeline is very robust." According to Govil, the Southeast Asian ride-hailing company Grab's planned listing via a merger with a special purpose acquisition company (SPAC) will provide additional valuation gain.
The group's net loss was JPY 398 billion, down from JPY 628 billion the year before. The investment loss of the Vision Fund totaled JPY 1.167 trillion. Following the expiration of lock-up periods, SoftBank has been reducing its stakes in companies like Uber and DoorDash in order to raise capital. The company has returned $9.8 billion to investors and is now focusing on investing through its second Vision Fund, which has a commitment of $40 billion from SoftBank and Son himself.
At the end of the quarter, the second fund had invested $33.5 billion in 157 startups. Eight of the companies have already gone public. SoftBank's stock, which has lost nearly a quarter of its value this year, fell 0.77 percent to JPY 6,161 ahead of its earnings report on Monday.
