In its fiscal first quarter, SoftBank reported one of its worst losses at its Vision Fund investment subsidiary as technology stocks continued to decline despite increasing interest rates.
The Vision Fund of the major Japanese company reported a 2.93 trillion yen ($21.68 billion) loss for the six-month period. For the Vision Fund, this is the second-largest quarterly loss.
This resulted in a 3.16 trillion yen net loss for SoftBank for the quarter as opposed to a profit of 761.5 billion yen in the same time previous year.
Due to the escalating inflation that has prompted the U.S. Federal Reserve and other central banks to boost interest rates, high-growth equities have suffered, which has negatively impacted SoftBank’s Vision Fund, which was established in 2017 and invests in technology businesses.
After reporting a record 3.5 trillion Japanese yen loss at the investment unit for the previous fiscal year, Masayoshi Son, the outspoken founder of SoftBank and the brains behind the Vision Fund, declared in May that the company would shift into “defense” mode and be more “conservative” with the pace of investments.
Widespread share price declines at SoftBank’s portfolio firms, according to the company, were “primarily triggered by the worldwide downward trend in share prices due to mounting fears over economic contraction fueled by inflation and rising interest rates,” the company claimed.
In the second quarter of the year, shares of businesses such South Korean e-commerce giant Coupang and American delivery service DoorDash took significant hits.
According to SoftBank, the share prices of the private businesses in its portfolio have also decreased.