Japanese conglomerate and tech investing powerhouse SoftBank revealed on Monday that it lost $23 billion between April and June, the most significant quarterly loss in the company’s history.
CEO Masayoshi Son’s multi-billion dollar investment spree over the past few years has turned into a nightmare for SoftBank in 2022 as rising interest rates and recession fears decimated tech shares and venture capital investments.
“When we were turning out big profits, I became somewhat delirious, and looking back at myself now, I am quite embarrassed and remorseful,” the CEO admitted at a press conference on Monday.
Son added that he will be making big changes at the companies’ tech-focused venture capital funds, called Vision Funds, over the coming months, looking to be “more selective in making investments,” because “the market and the world is in confusion.”
His comments echo similar statements made in May, when the company said it planned to go into “defense” mode after posting a record $26 billion loss in its investment unit last fiscal year.
Vision Funds have backed over 470 startups globally in the past six years, but SoftBank approved just $600 million in investments for the funds in the April-June quarter, a 97% decline in spending from the same quarter last year.
Son also noted that he is planning to “cost cuts with no sacred cows” in the current quarter, and excess staff may be the first to go.
“I have no choice but to cut a significant number of employees at the Vision Fund,” he said.
SoftBank was also forced to sell $10.5 billion of the Chinese e-commerce giant Alibaba’s stock to raise cash in the April-June quarter, and dumped an additional $6.8 billion in shares after the quarter ended.
While other investors, including Berkshire Hathaway’s Warren Buffett, have been buying during the dip in equities recently, Son argued rising risks have him second-guessing further investments.
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