Through its Vision Fund investment unit, SoftBank posted its biggest loss in its history as rising interest rates and inflation hit tech stocks.
Revealing the report, SoftBank recorded a loss for the month of June of ¥2.93 trillion or $21.68 billion which is the biggest decline in the 2nd quarter (Q2) of the Vision Fund.
Also, the net loss for the quarter was ¥3.16 trillion compared to a profit of ¥765.5 billion in the same period a year ago while the company approved a ¥400 billion share buyback program on Monday.
SoftBank founder Masayoshi Son commented that the decline recorded can be attributed to the actions of the Federal Reserve (Fed) and other central banks in implementing interest rate increases to curb inflation.
The matter put pressure on technology stocks, the Vision Fund's main investment focus, forcing the company to switch to 'defense' and 'conservative' mode after posting a loss of ¥3.5 trillion for the last fiscal year.
It was also highlighted that the share prices of various portfolio companies decreased due to the global downtrend due to increased concerns about the economic recession.
Son added, the world and the market are now in a state of confusion with most choosing to invest.
Like to be reminded where SoftBank relies on the public listing of private companies (IPOs) in raising funds to finance other startups (start-ups).
However, due to the widespread decline in the stock market, it has made it difficult for companies to implement IPOs, especially for the technology sector.
For now SoftBank is understood to be turning to the sale of stakes in companies to raise funds in addition to announcing it will sell stakes in a handful of companies, including Uber and Opendoor to raise $5.6 billion.
SoftBank also reported that the sale of Alibaba shares successfully brought in cash flow of $10.49 billion in the June quarter, and Son described the Chinese e-commerce as a good source of funds for the company.
