Workers on stage as they prepare for a SoftBank Group Corp. press conference in Tokyo, Japan, Thursday, June 27, 2024.
Toru Hanai | Bloomberg | Getty Images
SoftBank Group Mitsubishi Motors Corp. reported a 1.9 billion yen ($12.9 million) investment gain in its technology investment arm Vision Fund in the first fiscal quarter ended June, leading to a return to profit.
Gains by some of SoftBank’s Chinese portfolio companies — including TikTok owner ByteDance — helped offset losses by others such as AutoStore and Symbotech.
However, the Vision Fund segment as a whole posted a loss of 204.3 billion yen, after posting a profit in the same quarter a year earlier. The segment total takes into account non-investment performance, such as administrative expenses, as well as gains and losses attributed to third-party investors.
The Japanese giant also announced that it will buy back up to 6.8% of the company's available shares, worth up to 500 billion yen ($3.4 billion).
In the previous quarter, SoftBank posted a gain of 159.77 billion yen in its Vision Fund. In the quarter ended March, SoftBank posted a loss of 57.53 billion yen in its flagship technology investment arm.
SoftBank Group Corp. posted its first annual gain since 2021 in its Vision Fund in the fiscal year ended in March, benefiting from a surge in technology stocks and in some of its key holdings.
The Vision Fund's recent success is largely due to the successful initial public offering of chip designer Arm last year, in which SoftBank owns about 90% of the shares.
But SoftBank is once again facing volatile public markets. On Monday, SoftBank shares fell about 19% in a single day amid a broader slide in Japanese stocks triggered by the Bank of Japan’s interest rate hike last week.
However, Japan’s main indexes rebounded on Tuesday. But global markets remain volatile as investors remain concerned about the state of the global economy and high valuations are partly due to technology stocks.
SoftBank, which has suffered from bad bets over the past few years, is trying to position itself to investors as a major player in the AI boom. The company’s management has highlighted its investments in companies like Arm and self-driving startup Wayve as signs that the Japanese giant is ready to capitalize on the growth of AI.
SoftBank founder Masayoshi Son, who has long been out of the limelight, returned this year to present his vision of artificial intelligence that he expects to be 10,000 times smarter than humans within 10 years.
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SoftBank Group Corp.'s net sales in the second quarter rose 9.3 percent on-year to 1.7 trillion yen, beating analysts' expectations. Net profit came in at 10.5 billion yen after a loss of 316.2 billion yen in the second quarter of last year.
SoftBank was helped in part by a $235.7 billion gain in Alibaba shares and a $179.1 billion gain in T-Mobile shares.
The tech group grew to become one of Japan’s biggest companies thanks to Son’s early bet on Chinese e-commerce giant Alibaba in 2000, which boomed over the years. However, the company has reduced its stake in Alibaba as it looks to use the money to fund bets on artificial intelligence.
