Softbank Group Corp swung to its first profit after four straight quarters of losses, backed by a rebound in the value of Vision Fund’s public holdings and a windfall from T-Mobile US Inc shares.
The Tokyo-based technology investor reported a net income of ￥950 billion (US$6.4 billion) for the December quarter, reversing a ￥783 billion loss for the same period a year ago. It is the Japanese company’s first profit since September 2022, as it navigates volatile swings in the value of its start-up investments.
The Vision Fund unit reported a ￥422.74 billion gain for the period, up from a loss of ￥660.1 billion a year ago. DoorDash Inc, AutoStore Holdings Inc and Symbotic Inc were among the best performers contributing to the Vision Fund. The value of subsidiary Didi Global Inc’s (滴滴) shares also rose 22 percent in the over-the-counter market.
Photo: REUTERS
The solid quarter might herald more relief to come, Astris Advisory Japan analyst Kirk Boodrysaid. “We have not been overly bullish on the current portfolio, but the listing of key VF1 assets like ByteDance Ltd (字節跳動) or Fanatics Inc could provide some relief in 2024,” he wrote in a note ahead of the earnings, referring to Vision Fund’s investments in China’s TikTok owner and the US online sportswear and fan gear store.
Softbank booked an extra windfall from an arrangement to receive more than 48 million T-Mobile shares worth almost US$8 billion. The deal was part of an agreement struck when T-Mobile acquired rival and former Softbank unit Sprint Corp in 2020, designed to give Softbank more T-Mobile shares if the stock rose above a certain level during a given period.
A 40 percent rally in newly-listed chip design unit Arm Holdings PLC’s shares in the December quarter further bolstered Softbank’s finances. As the owner of about a 90 percent stake in the UK firm, Softbank would likely be able to use Arm to help finance loans for new investments, in the same way a stake in Alibaba Group Holding Ltd (阿里巴巴) helped Softbank secure financing to acquire Arm in the first place.
However, skepticism remains about the Vision Fund’s hundreds of privately-held start-ups. The second Vision Fund, funded entirely by Softbank, is mired in losses after a post-COVID-19 pandemic slump hurt tech valuations worldwide. The first Vision Fund has had its own share of losses, including from WeWork Inc, the start-up once valued as much as US$47 billion that filed for bankruptcy last year.
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