By
Godfrey Benjamin
April 18th, 2024
Following an $18 billion loss in 2019, SoftBank Vision Fund added nearly 3 billion. The increase is turning SoftBank’s books around.
SoftBank Group Corp (OTC: SFTBY) recorded a profit of almost $12 billion in the April-June quarter due to gains from its $100 billion Vision Fund. With this recent achievement, SoftBank is on the path of recovery after reporting its worst-ever loss in the previous quarter.
SoftBank Reports Profit
Earlier this year, SoftBank announced the largest annual loss of its kind in Japan, totaling $13 billion. This loss is coupled with the departure of key board member, Jack Ma, a Co-founder of e-commerce giant Alibaba.
However, SoftBank Vision Fund recorded an investment gain of $2.8 billion from certain bets like Uber (NYSE: UBER) and Slack Technologies (NYSE: WORK). UBER and WORK jumped in prices during the second quarter as tech stocks surged in the US at the period. With the $2.8 billion investment gain, SoftBank Vision Fund is beginning to rebound from its $18 billion loss in 2019.
Furthermore, the recent performance of the Vision Fund was aided by new stock market listings in the US. An example is one of SoftBank’s backed companies, Lemonade Insurance (NYSE: LMND) with a current market capitalization of almost $4 billion, SoftBank earlier backed LMND with $300 million.
In March, SoftBank revealed plans to sell about $41 billion worth of assets as a buyback effort. With the profit made, the Japanese company hoped to buy back 2 trillion yen of its shares. The company also expected to reduce debt with this move. The plan made the bank increase the price of its share.
According to The Wall Street Journal, unnamed sources confirmed that Softbank hired Goldman Sachs (NYSE: GS) to explore sale options for chip designer ARM. This attempt is to source more funds to support companies for its $100 billion Vision Fund.
In addition, a CNBC report revealed that SoftBank is presently considering selling UK chip designer ARM to US chip giant Nvidia. It also showed that the Chief Executive of SoftBank, Masayoshi Son, attested to news about the company’s plan to sell chip designer ARM. According to the CEO, he may even take ARM public.
SoftBank Vision Fund
Founded in May 2017, SoftBank Vision Fund is a subsidiary of Softbank Group that focuses on growth capital and social impact investments. In partnership with The Public Investment Fund of Saudi Arabia, SoftBank began the $100 billion project.
Also, in 2019, SoftBank Vision Fund started SoftBank Vision Fund 2 to invest in artificial intelligence (AI). The SoftBank Group Corp. pledged $38 billion to the project. Other investors in the SoftBank Vision Fund 2 include Apple, Foxconn, and Microsoft.
Currently, SoftBank is trading at $30.08, more than a 2% loss over its previous close of $30.73. In the last twelve months, SFTBY has surged over 28% and nearly 40% in its year-to-date performance. Despite a 38.27% gain in the last three months and less than 1% increase in the past month, Softbank’s stock has dropped over 7% in the last five days.