SoftBank Quarterly Loss: In the fiscal second quarter, SoftBank reported an investment gain on its Vision Fund, but it also reported a quarterly loss.
- IMPORTANT NOTES
- In the fiscal second quarter, SoftBank reported an investment gain on its Vision Fund, but it also reported a quarterly loss.
- The Vision Fund gain, according to the business, resulted from the selling of shares in chipmaker Arm to a SoftBank affiliate.
- This compensated for a drop in the value of SoftBank’s investments, such as Chinese artificial intelligence startup SenseTime.
Here’s how SoftBank performed in the September quarter in comparison to LSEG estimates:
- 1.67 trillion Japanese yen ($11 billion) in net sales versus 1.6 trillion yen projected
- Net loss: 931.1 billion yen ($6.2 billion), compared to a loss of 114.1 billion yen projected.
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SoftBank lost $1.41 trillion ($9.3 billion) in the first half of its fiscal year. This is compared to a profit of 3 trillion yen in the same period last year. SoftBank stated that a weaker yen hurt the corporation since it had a large amount of debt denominated in US dollars. SoftBank’s Vision Fund earned 21.3 billion yen in investment gains for the second quarter in a row. This was owing to a gain from the sale of shares in chip designer Arm to a SoftBank affiliate, according to the business.
This compensated for a drop in the value of SoftBank’s investments, such as Chinese artificial intelligence startup SenseTime. “The environment is still difficult… but we believe we have reached a bottom and are making good progress toward positive figures,” SoftBank Chief Financial Officer Yoshimitsu Goto said during an earnings presentation on Thursday.
WeWork bankruptcies hit
However, the whole SoftBank Vision Fund division lost 258.86 billion yen before taxes. SoftBank lost 234.4 billion yen in the first half of the year as a result of its investment in and financial support for WeWork, which filed for Chapter 11 bankruptcy protection in the United States this week. SoftBank was a major backer of the co-working space company, which attempted and failed to go public five years ago.
Critics of SoftBank’s investment approach refer to WeWork as an example of the Vision Fund’s lack of discipline at times. WeWork, according to SoftBank’s high-profile founder Masayoshi Son, is at the forefront of a “revolution” in the way people work. Goto addressed the WeWork bankruptcy, saying that SoftBank should learn from it.
“First and foremost, I am delighted to hear that. “As a company, we must accept this reality while also learning from it for future investment activity,” Goto added.
SoftBank’s main technology investment arm had a difficult fiscal year that concluded in March of this year, generating a record loss of nearly $32 billion. A drop in tech stock prices and the failure of some of SoftBank’s China projects were to blame.
The Vision Fund earned its first investment gain in five consecutive quarters in the June quarter, indicating early signs of recovery. Last year, Son stated that the company would go into “defense” mode, lowering its investment rate and becoming more cautious. Son signaled a change into “offense” mode in June, extolling his enthusiasm for the potential of artificial intelligence technologies.
“We are investing in AI and that’s the main strategy for our company,” Goto told me.
Son, who used to lead SoftBank’s earnings calls with colorful slides, has been absent for several quarters. Son, on the other hand, has been “devoting himself and involved in the discussion, how and what is going to be the changes in people’s lives from the AI revolution,” according to Goto.
SoftBank, according to the CFO, wants to be at the forefront of the AI revolution. During SoftBank’s fiscal second quarter, chip designer Arm went public in the United States. Arm was purchased by the firm in 2016 for approximately $32 billion. Arm’s initial public offering valued the company at more than $50 billion.
Arm released its first set of earnings since its IPO on Wednesday, reporting an increase in revenue year over year for the September quarter. However, the semiconductor company provided disappointing expectations for the December quarter, sending its shares lower in after-hours trading in the United States.
Frequently asked questions
What is SoftBank known for?
The firm generally invests in technology companies that provide goods and services to clients across a wide range of sectors and industries, from the internet to automation.
What companies are owned by SoftBank?
SoftBank Corp. Companies
- A Holdings Corporation. Strategic holding company that owns of LY Corporation shares.
- AGOOP Corp. Location-based big data business. …
- ALES Corp. …
- AXSEED,Inc. …
- BB Backbone Corporation. …
- BB Satellite Corp. …
- BBIX, Inc. …
- BBSS Corporation.
Why did SoftBank fail?
SoftBank’s Vision Fund investment branch has experienced difficulties as technology firm values have fallen in the face of rising interest rates. SoftBank’s Vision Fund suffered a record loss, as a recent rise in technology markets did little to alleviate another rough year for the company’s flagship investment business.
Why did Softbank quarterly loss is high?
Softbank reported a net loss of 477.6 billion yen ($3.3 billion) in the second quarter, according to an earnings announcement issued today (Aug. 8). It lost money on its investments, owing primarily to “declines in the share prices of Alibaba, Deutsche Telekom, and T-Mobile.”
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