SoftBank Group Corp. of Japan sold some of its shares in Alibaba, a company in China. The company said it had made a profit for the first time in three quarters, even though its huge Vision Fund business had another big quarterly loss.
A source close to SoftBank said that the large Vision Fund’s big bets on startups shook up the IT industry. It will also write down to zero the value of its assets in the FTX cryptocurrency exchange, which is going bankrupt. The source said that the total amount of these investments was less than $100 million.
In the last three months, FTX has had a lot of problems.
The problems at FTX are the latest setback for Vision Fund, which has been hit hard in recent quarters by a worldwide tech downturn. This has forced Masayoshi Son, the CEO of SoftBank, to make a lot fewer new investments.
The source said that it was helping FTX, which was valued at $32 billion in January but is now trying to raise about $9.4 billion. It would worry bigger investors as the digital giant pulls back to cut costs and refocuses on managing the portfolio it already has.
Vision Fund’s chief financial officer, Navneet Govil, says that the company plans to cut its workforce by 30% or more.
SoftBank will keep its guard up.
In the three months before September 30, the value of Vision Fund’s portfolio went down. $9.75 billion worth of investments were losing money because of it. With this, the fund’s total investment loss for the nine months ending in September came to about $60 billion.
Son said that this would be his last earnings briefing for the “foreseeable future.” He also said that he was in good health. He would also devote his spare time and energy to business ventures, such as working with British chip designer Arm.
Son said, “For at least the next few years, I plan to focus only on Arm’s explosive growth, while SoftBank’s other businesses will stay on the defensive.” “I’m naturally good at being rude.” “I would like to work on Arm’s offense.”
After the sale to Nvidia fell through, Son said he wanted to put Arm on the American stock market. But a source close to the company said on Friday that the listing was likely to happen after the fiscal year ends in March 2023.
Ian Thornton, vice president of Arm, says that the company still plans to go public in 2019.
SoftBank is synonymous with Son, who has taken a completely different path than any other Japanese company with his risky bets on everything from Chinese tech to startups like WeWork.
SoftBank’s net income for its second quarter, which ran from July to September, was 3.03 trillion yen. But in the first quarter, the company said it lost 3.16 trillion yen.
Days after talking about the huge loss in the first quarter, SoftBank said it would settle prepaid forward contracts to cut its share of Alibaba Group Holdings from about 24% to about 15% and make an estimated 4.6 trillion yen in profit in the second quarter.
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