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Softbank suffers 10bn losses.

 


Masayoshi Son said he would step back from running day-to-day operations at SoftBank to «devote» himself to turbocharging growth at Arm, the UK chip designer owned by the Japanese group. The SoftBank founder said in a 30-minute speech that could be his final appearance at financial results that he wanted to remain on the offensive with Arm, as the technology conglomerate posted quarterly investment losses of $10bn. In addition to the losses, said a person familiar with the matter, SoftBank would probably write down to zero its investment of about $100mn in FTX, the collapsing crypto exchange. At a briefing yesterday, Yoshimitsu Goto, SoftBank’s chief financial officer, said the Vision Fund’s overall investment in crypto was small.

Despite the investment losses, Soft Bank returned to profit for the first time in three quarters, mainly due to its historic selldown of its stake in Alibaba, the Chinese e-commerce group. For the July to September quarter, SoftBank reported an investment loss of ¥1.38tn, compared with ¥2.93tn in the previous quarter for its two Vision Funds and a fund investing in start-ups in Latin America. Only two days after reporting its worst quarterly performance, in August, SoftBank revealed that it would post a gain of ¥4.6tn by selling shares in Alibaba, significantly reducing the investment on which Son built his name as one of the world’s most prominent technology investors. In addition to the Alibaba sale, SoftBank cut 30 per cent of its Vision Fund staff by the end of September and sharply reduced the size of its investments over the past six months.

SoftBank’s plan to sell Arm to Nvidia, the chipmaker, for up to $66bn fell in February after more than a year of wrangling with regulators in the UK, US and EU. Though royalty revenues increased more than a fifth, to $916mn, partly due to shipments of high-end 5G smartphones and higher royalty rates, non-royalty revenues, including licensing income, decreased 34 per cent to $459mn. Despite the falling valuation of its Vision Fund investments, shares in Soft Bank have risen nearly 30 per cent this year as the group sharply accelerated the pace of its share buybacks.

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  1. Chad12 November 2022 at 17:17

    I don't know if selling their Alibaba shares was the smartest choice but there are certainly a lot of things that I don't know or understand. Son probably made the best decision at this moment for the bank.

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