Japanese investment giant SoftBank on Tuesday reported an unexpected loss of 477,616 billion yen ($3.3 billion) in the first quarter (Q1) covering April-June, despite an investment gain from its massive tech-focused Vision Fund.
The Vision Fund investment unit, through which SoftBank invests in high-growth technology companies, reported a profit of $1.1 billion in the June quarter, reports CNBC.
The company, which has been reducing its stake in Alibaba in order to recoup losses from last year’s technology stock meltdown, reported an unrealised valuation loss on Alibaba shares of more than $3.8 billion.
However, this was offset by a derivative gain of over $5.3 billion.
Moreover, the report mentioned that the fair value of SoftBank’s listed portfolio companies increased to $25.4 billion at the end of the June quarter, up from $24.9 billion as of March 31.
The fair value of the Japanese conglomerate’s private portfolio companies, which account for the majority of its investments, increased to $61.3 billion as of June 30 from $60.5 billion the previous quarter.
In the last quarter that ended in March 2023, SoftBank posted a record $32 billion loss at its Vision Fund as funding winter continues amid global macroeconomic conditions.
As tech startup valuations continue to dip, the Vision Fund vertical posted a $32 billion loss for its fiscal year.
“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,” the company said in its earnings report.
The SoftBank Vision Fund 1 and Vision Fund 2 made new and follow-on investments, including those through share exchanges, totalling $3.14 billion in the fiscal year, “a significant reduction from $44.26 billion in the previous fiscal year”.