The Japanese major investor Softbank wants to appease shareholders with share buybacks and possibly turn things around with layoffs. Inflation, bloated prices and bad decisions have pushed the company deep into the red.
The crisis in technology stocks with a slump in valuations brought the Japanese major investor Softbank the biggest quarterly loss in the company’s almost 40-year history. From April to June, a deficit of the equivalent of almost 23 billion euros was incurred, the group said. In the same period last year there was still a profit of around 5.5 billion euros on the balance sheet. “The world is in great disarray,” said company founder Masayoshi Son. At the same time, he blamed himself for the downturn and explained that Softbank had invested in too many companies. The ratings were in a bubble.
The Tokyo-based investor has stakes in countless companies around the world through its two Visions Funds, which dominate its business activities: including ride-hailing service provider Didi, online retailer Coupang, Uber competitor Grab and Chinese tech giant Alibaba. After billions in profits a year ago in a row from numerous profitable IPOs, technology investors such as Softbank and Tiger Global are now feeling the effects of higher inflation, political uncertainties and economic weakness. The two Vision Funds came in at a minus of more than 21 billion euros in the past three months. This was also due to the decline of the AI ??startup SenseTime and the robot company AutoStore.
Son has already announced that he will invest more selectively in the future and hold more money. At the same time, he no longer rules out layoffs. There are no more “sacred places”. In order to keep investors on board, he has launched a share buyback program worth up to 2.9 billion euros.
Son has taken down more than $8 billion of the Vision Fund’s privately funded startups, which include delivery service Blinkit and travel platforms Oyo and GetYourGuide. However, experts assume that these do not yet reflect the current tech weakness.
Softbank is now banking on an early IPO of the British chip designer Arm, which should flush billions into the coffers. So that money doesn’t run out in the meantime, Softbank has sold stakes in Uber and the real estate platform Opendoor for more than five billion dollars.
The Japanese are also the second largest shareholder in Deutsche Telekom after the federal government. The Bonn-based company is aiming for a majority stake in the US mobile operator T-Mobile US and therefore wants to buy more shares in the US company from Softbank.
