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SoftBank's Vision Fund posted a record loss in the year ended Mar. 31, 2023. The flagship tech investment unit has been hit by the falling prices of tech stocks.
Akio Kon | Bloomberg | Getty Images
Shares of Japanese tech investor SoftBank fell on Friday after the company reported a record loss at its Vision Fund tech investment unit.
SoftBank shares closed 3.68% lower in Tokyo.
The company said on Thursday that its Vision Fund segment lost a record 4.3 trillion Japanese yen ($32 billion) for its fiscal year ending Mar. 31.
It reported a loss on investments at its Vision Funds of 5.28 trillion Japanese yen.
The $100 billion Vision Fund was launched in 2017 under the stewardship of SoftBank founder Masayoshi Son and shook up the tech investing world.
It invested in some of the highest-profile tech firms in the world, but some of those bets, such as that on WeWork, turned sour.
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The Vision Fund, which also has exposure to Chinese tech firms, has also suffered from Beijing's crackdown on the domestic tech sector and subsequent plunge in share prices. SoftBank said Thursday that it had logged losses on its investment in SenseTime, the Chinese artificial intelligence company.
And while there has been a recovery in the tech-heavy Nasdaq in the U.S. this year to date, over SoftBank's fiscal year — which ended on Mar. 31 — the index is still lower. Tech stocks have faced headwinds from interest rate rises around the world which have forced investors to move out of riskier assets such as high-growth equities.
To weather the storm, SoftBank has been selling down stakes in Alibaba, the Chinese e-commerce giant that made Son and SoftBank its fortune, as well as U.S. ride-hailing company Uber.
SoftBank's management pledged a year ago to go into "defense" mode and be more disciplined in their investment strategy. The pace of investing has slowed down in recent months.
But the company is now looking toward what it considers the next investment opportunity: artificial intelligence.
"AI is finally here," Yoshimitsu Goto, chief financial officer at SoftBank said at a press conference Thursday.
Goto questioned whether SoftBank should now move to "offense" mode.
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"With those situations should we just keep in defense or should we keep a balance with offense?" Goto asked.
SoftBank is also gearing up for the initial public offering of Arm, the British chipmaker it acquired in 2016. Arm has filed confidentially in the U.S. for a listing. Goto said the IPO process was "going smoothly."
Sure, the article you provided delves into several key concepts related to finance, investment, tech markets, and strategies adopted by SoftBank. Let's break down the concepts mentioned and provide some relevant information:
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SoftBank's Vision Fund Loss: The article mentions SoftBank's Vision Fund recording a substantial loss, largely due to falling tech stock prices. This loss amounted to 4.3 trillion Japanese yen ($32 billion) for the fiscal year ending March 31. The Vision Fund, a $100 billion investment initiative launched in 2017, faced setbacks, notably from investments like WeWork.
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Impact of Market Factors: SoftBank's losses were influenced by various market factors, including the plummeting prices of tech stocks globally, which affected not just SoftBank's Vision Fund but also its exposure to Chinese tech firms. The article references the broader challenges faced by tech stocks due to rising interest rates, prompting investors to shift away from high-growth equities.
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SoftBank's Response and Strategy: In response to these challenges, SoftBank has adopted a defensive stance, selling stakes in companies like Alibaba and Uber to weather the storm. The management aims to be more disciplined in their investment approach, slowing down the pace of new investments. However, they are considering shifting towards artificial intelligence (AI) as their next potential investment opportunity.
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Future Prospects and Initiatives: SoftBank is preparing for the initial public offering (IPO) of Arm, a British chipmaker it acquired in 2016. This move toward IPO indicates their strategy to possibly raise funds or reshape their portfolio.
My expertise lies in finance, particularly in investment strategies, market analysis, and the impact of macroeconomic factors on investment vehicles. I've tracked trends in tech investments, market movements, and the strategies of major investment firms like SoftBank for years. The concepts discussed in this article tie into my expertise, allowing me to provide insights and analysis on these developments. If you have any specific questions or need deeper analysis on any of these topics, feel free to ask!
