SoftBank Ends Lower as Portfolio Firms Bleed Vision Fund
By Dhirendra Tripathi
Investing.com – Softbank stock (T:9984) closed 0.8% lower in Tokyo Monday as heavy erosion in the share prices of portfolio companies took a toll on its flagship Vision Fund’s second-quarter performance.
The unit’s loss in the September quarter widened to 825.1 billion yen ($7.3 billion) owing to pandemic-driven writedowns, chiefly on Chinese ride-hailing giant Didi Global (NYSE:DIDI). Overall, the Group’s net loss was 397.9 billion yen.
Founder Masayoshi Son’s strategy of taking portfolio companies public has had its ups and downs. For the last quarter, the volatility in markets, caused largely by a regulatory crackdown in China, has hurt the fund’s portfolio, which includes Alibaba (NYSE:BABA), Didi (NYSE:DIDI) and Coupang (NYSE:CPNG), among others.
Alibaba (NYSE:BABA) saw its valuation fall by nearly a third during Softbank's fiscal second quarter.
The negative mark-to-market for public companies held by Softbank's two Vision Funds came to $17.7 billion during the quarter. Coupang was responsible for $6.7 billion of it and Didi $6.1 billion, according to Bloomberg.
The fund did manage to cash out some of its stakes successfully, generating 455.9 billion yen of realized gains during the quarter. SoftBank sold $2.2 billion of DoorDash (NYSE:DASH) stock in August and raised about $1.69 billion from a sale of Coupang stock the next month, the agency said.
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