SoftBank Group posts $1.3bn loss on tech stocks bet

Saleha Riaz
·2 min read
SoftBank CEO Masayoshi Son had said in August the firm would put excess cash from asset monetisation in tech stocks and derivatives. Photo: Charly Triballeau/AFP via Getty Images
SoftBank CEO Masayoshi Son had said in August the firm would put excess cash from asset monetisation in tech stocks and derivatives. Photo: Charly Triballeau/AFP via Getty Images

Japan's SoftBank Group (SFTBY) reported a ¥131.7bn ($1.2bn, £963.1m) loss on its diversification into trading technology stocks, although its Vision Fund has showed some promise.

SoftBank at the end of September held positions worth $16.8bn in stocks including Amazon (AMZN), Google parent Alphabet (GOOG) and Facebook (FB).

Chief executive Masayoshi Son had said in August the firm would put excess cash from asset monetisation in tech stocks and derivatives amid an uplift in valuations in the sector.

Meanwhile its $100bn Vision Fund’s portfolio recovered to above acquisition price. Vision Fund’s $75bn investment in 83 startups was worth $76.4bn at the end of September.

Softbank Group's performance, year to date. Chart: Yahoo Finance UK
Softbank Group's performance, year to date. Chart: Yahoo Finance UK

Net income attributable to shareholders rose ¥1.88tn in the six months through September, up from ¥421.6bn yen a year earlier. That in part reflected a gain related to the merger of portfolio firm Sprint with T-Mobile US (TMUS).

It also reported a net profit of ¥627bn for the July-September quarter. This was quite a recovery from a ¥700bn loss in the same period last year.

READ MORE: Stocks rally worldwide as markets welcome Joe Biden victory

The profits for the quarter were partly offset by derivatives losses tied to its stake in China's Alibaba Group Holding.

Softbank said it spent ¥139.3bn repurchasing around 20 million shares in October, part of a record buyback plan.

The company said it would not offer a forecast "as it is difficult to foresee consolidated results due to numerous uncertain factors."

The company also said operating income will no longer be presented in its earnings. Instead, gain or loss on investments will be used in order to show investment performance.

It said it “determined that ‘operating income’ was not useful in appropriately presenting the consolidated financial results of a strategic investment holding company.”

WATCH: What is inflation and why is it important?