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SoftBank: Trimming Losses, Paving the Path for an Offensive Turnaround!

by Tech Desk
1 minutes read
SoftBank: Trimming Losses, Paving the Path for an Offensive Turnaround!

Japanese technology company SoftBank Group has reported continued losses in the fiscal first quarter, largely due to deteriorating technology investments amid a market downturn. However, the losses of 477.6 billion yen ($3.4 billion) for April-June were lower than the previous year’s total of 3.16 trillion yen ($22 billion). The losses primarily came from SoftBank’s Vision Funds and other investments, including telecommunications in Japan.

Despite the losses, Chief Financial Officer Yoshimitsu Goto remains optimistic about the future. He believes that the environment for technology issues is improving and emphasizes the need to adjust investment strategies accordingly.

SoftBank’s Vision Fund 1 has posted a profit of $12.4 billion since its inception, while Vision Fund 2 is still at a loss of $18.6 billion. The performance of Vision Fund 1 was boosted by rising values in holdings such as South Korean e-commerce company Coupang and Singaporean technology company Grab. However, declines in Didi and other Chinese companies offset these gains.

In terms of Vision Fund 2, strong performance from Symbolic, a US warehouse robotics company, was counterbalanced by a decline in WeWork, a US co-working space company. Goto asserts that Clearly investment performance for both funds is improving.

The recent quarterly loss was also influenced by the decline in the value of the yen, which negatively affected Japanese investors. If currency fluctuations are not taken into account, SoftBank’s investments were essentially breaking even.

Quarterly sales remained relatively stable with a slight decrease of nearly 1% to 1.56 trillion yen ($11 billion). SoftBank does not provide full-year forecasts.

SoftBank has historically struggled during technology downturns and has been impacted by events like the US banking crisis and geopolitical uncertainties such as Russia’s invasion of Ukraine earlier this year.

However, there are signs that conditions within the global tech sector are gradually improving, as seen in the rising stock prices of major companies like Amazon, Facebookand Alphabet. SoftBank previously held significant stakes in these companies but sold them in 2021 to weather tough times.

SoftBank’s founder, Masayoshi Son, known for his visionary approach, plans to shift from a defensive to an offensive investment strategy. The company aims to lead investments in artificial intelligence and has already invested in Telexistence, a company developing robots that stock shelves in Japanese stores.

Additionally, SoftBank is planning an initial public offering (IPO) for its subsidiary Arm in the US. While details remain scarce, this IPO could provide a boost to SoftBank’s bottom line.

Shares of SoftBank Group Corp. rose by 1.5% on the Tokyo Stock Exchange following the announcement of its quarterly results.

It is widely announced that (ABC News), SoftBank Group Corp. continues to face losses due to deteriorating technology investments amid a market downturn. However, the company remains optimistic about the future and believes that conditions for technology issues are improving.


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