The SoftBank Corp logo is displayed. On a glass door of the company's store in Tokyo, Japan, on Wednesday, May 8, 2024. SoftBank Group Corp. is scheduled to report its earnings numbers on May 13. Photographer: Toru Hanai/Bloomberg via Getty Images
Tohru Hanai | Bloomberg | Getty Images
Japanese giant Softbank It posted a gain of 608.5 billion yen ($3.96 billion) on its technology investment arm Vision Fund in the fiscal second quarter ended Sept. 30, marking a sharp quarterly increase after returning to the black in the three months through June.
The broader Vision Fund sector as a whole, which also takes into account non-investment performance such as administrative expenses and gains and losses attributable to outside investors, posted a gain of 373.1 billion yen. It reported a loss of 204.3 billion yen in the company's first fiscal quarter.
The company attributed the lion's share of the increase to the valuation gains recorded in the SoftBank Vision Fund 1, noting the rise in the share prices of the e-commerce company Coupang and the Chinese giant of passenger transportation services Didi Global, as well as the increase in the value of its investments in China. Technology company Bytedance.
Meanwhile, Vision Fund 2 saw a net loss of 232.6 billion yen, after stock prices including shares of Norwegian robotics company AutoStore and US automation technology company Symbotic fell.
The Vision Fund benefits from the success of the smartphone chip designer's September 2023 listing Holding armIn which it has an overwhelming majority stake of about 90%.
Masayoshi Son's technology group has seen its share of controversial high-value investments in recent years in companies that have either collapsed or whose valuations have fallen sharply. Now it's repositioning itself at the center of the AI boom, where gamers love it Nvidia They are reaping the rewards of increased demand for chips and GPUs in data centers.
An early investor in Yahoo! And Alibaba, Son now describes Nvidia, the US giant worth $3.57 trillion, as “undervalued” and predicts the emergence of artificial intelligence that is 10,000 times smarter than humans within 10 years – amid media reports in the late September reports that SoftBank will invest $500 million in key industrial projects. Intelligence player OpenAI's latest funding round.
SoftBank Group net sales as a whole increased by 6% to 1.77 trillion yen.
The printing group benefited from investment gains amounting to 1.28 trillion yen on shares of the Chinese retail giant Alibaba and 566.2 billion yen on shares of T-Mobile.
Tokyo-listed SoftBank shares were up nearly 50% year to date, as of Tuesday morning. The company announced its latest quarterly earnings after the Japanese Stock Exchange closed.
The company is facing pressure from activist investor Elliott Management, which built a roughly $2 billion stake in SoftBank and pushed for a $15 billion stock buyback, CNBC reported in June. The group announced in August that it would buy back 6.8% of the company's available shares, worth 500 billion yen ($3.25 billion). It said on Tuesday that it had repurchased a cumulative 153.8 billion yen worth of shares by the end of the second quarter.
Japanese companies faced high volatility during the summer quarter, amid a rapid appreciation of the yen and a large sell-off of risky assets in August. Domestic markets have calmed compared to the summer's turmoil, as Japan navigates its shift away from ultra-low interest rates – but analysts at Barclays point out that the country's economic outlook is not yet stable.
“This volatility is likely to continue,” they wrote on November 8. “Wage growth, especially in the services sector, is progressing in line with the Bank of Japan’s expectations, leading many to expect another rate hike in December 2024 or January 2025.” .
