SoftBank Vision Fund posts record $8 billion profit
SoftBank Group Corp. reported a record profit in its Vision Fund as a surging stock market lifted the value of its portfolio companies, but founder Masayoshi Son wiped out a significant chunk of those gains with his controversial trading in derivatives.
The Vision Fund reported a 844.1 billion yen ($8 billion) profit in the December quarter, surpassing record numbers set just a quarter earlier. A global rally in technology shares has boosted the value of SoftBank’s stakes in publicly traded firms like Uber Technologies Inc. and paved the way for initial public offerings from the likes of DoorDash Inc.
Those gains, which had been widely expected, were offset by fallout from Son’s decision last year to start dabbling in trading stocks and options.
SoftBank posted a 285.3 billion yen derivatives loss in the period.
That led to an overall loss in the asset management arm of 113.5 billion yen, up from 85.2 billion yen in the previous three-month period.
“The Vision Fund’s stellar performance in the past few quarters continues to cover for the losses on options trading,” said Anthea Lai, an analyst
with Bloomberg Intelligence. “SoftBank could argue those derivatives were for hedging purposes, but Son’s venture into trading is definitely not looking good so far.”
In a presentation to investors after the results, Son focused on his successes. He reprised his argument that SoftBank is like a goose that lays golden eggs, from Alibaba Group Holding Ltd and Yahoo! two decades ago, to companies like Uber and DoorDash more recently. Some 15 companies have gone public from the Vision Fund so far, he said.
“Since the Vision Fund launched, the number of golden eggs is in accelerating
mode,” he said, pacing a stage in a white turtleneck sweater and grey jacket. “We are finally in the harvesting stage.”
He said Vision Fund 1 and Vision Fund 2 have invested in a total of 131 companies. In the case of DoorDash, SoftBank invested about $680 million for a stake now worth about $9 billion, he said, while its $7.7 billion investment in Uber is worth $11.3 billion.
The Tokyo-based company had a net income of 1.17 trillion yen in the December period and did not release operating profit figures.
At least six more portfolio companies are planning IPOs this year.