Softbank Group Corp yesterday reported an annual net loss of US$7.2 billion after a bruising year for the tech start-up sector in which it is heavily invested.
The company said its annual net loss came to ￥970 billion (US$7.2 billion) on sales of ￥6.57 trillion, reflecting in part major losses from its Vision Fund portfolios.
The Vision Fund 1 and 2 vehicles were hit by the global tech rout, the company said in a statement.
Photo: Reuters
“Share prices of numerous public portfolio companies declined for the fiscal year amid the weakness in global stock markets, although share prices of several companies rose in the fourth quarter,” it said.
“The fair value of a wide range of private portfolio companies also decreased, reflecting markdowns of weaker-performing companies and share price declines among market comparable companies,” it added.
The two funds recorded ￥4.3 trillion in losses, Softbank said, as they took hits across a range of start-up investments, from long-struggling WeWork Inc to delivery service DoorDash Inc.
“Softbank Group’s performance very much depends on share prices,” Toyo Securities Co analyst Hideki Yasuda said ahead of the company’s announcement.
Analysts fear that more bad news might be on the cards.
RISK OF MARKDOWNS
“We believe that the private company portfolios ... are at risk of further meaningful markdowns going forward,” wrote Victor Galliano, an analyst who publishes on SmartKarma.
Vision Fund vehicles had reported losses for four straight quarters through December last year.
Meanwhile, the company’s mobile unit has declared it is joining a global race to build a version of ChatGPT, following a plethora of US and Chinese corporations and start-ups vying to roll out their own conversational bots.
Wireless unit Softbank Corp set up a new entity in March, choosing about 1,000 people to develop a Japanese-language version of ChatGPT, chief executive officer Junichi Miyakawa said during an earnings briefing on Wednesday.
He did not elaborate on the project’s goals or progress so far.
Softbank Group billionaire founder Masayoshi Son, who for years touted AI as a revolutionary force in the way we use technology, gathered a group of engineers recently and spoke about ChatGPT’s possibilities, Miyakawa said.
He did not give details.
“We are dead positive on ChatGPT,” Miyakawa said. “Most of our meetings these days touch on topics related to ChatGPT. The ChatGPT party has started.”
Additional reporting by Bloomberg
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