TOKYO— SoftBank Group Corp.
9984 4.45%
has brought red-hot stock markets to a large quarterly profit, mainly due to investment gains at its $ 100 billion Vision Fund and its $ 10 billion successor.
The Japanese technology investor said on Monday that it had a net profit of ¥ 1.17 trillion, equivalent to about $ 11 billion, on investment profit of ¥ 1.77 trillion during the quarter ended December 31st. Nearly 80% of the investment profit was due to strong performance at Vision Funds 1 and 2.
The anticipation of strong results raised SoftBank’s share price by 4.4% to 9,485 yen on Monday – a level last seen in February 2000 when the company’s shares peaked during the internet bubble.
“We have finally entered the harvest phase” for the Vision Fund, said Masayoshi Son, CEO of SoftBank, at a news conference in Tokyo.
The results show that the boom in public markets over the past few months has benefited SoftBank, which has completed its metamorphosis into a telecommunications conglomerate investment holding company over the past year. Rising stock prices last year helped SoftBank retreat into the blacks due to a loss of billions of dollars.
These gains continued in the most recent quarter, increasing the market capitalization of Vision Funds’ listed companies – most notably Uber Technologies, a luxury company. Inc.,
one of the largest investments of the fund.
Enthusiastic investors in the public market also gave SoftBank an investment money when the Vision Fund portfolio company DoorDash Inc.
listed in December. Shares of the U.S. food delivery company immediately rose above their initial price for public offering. By the end of the month, DoorDash earned the fund more than $ 8 billion in paper profits, and its shares have continued to rise since then.
SoftBank said the quarter ended December was the best of the Vision Fund ever, resulting in a $ 13 billion increase in the value of its investments.
SoftBank intends to continue to benefit from strong markets this year. Half a dozen or more Vision Fund investors – some of whom already have billion-dollar valuations – are preparing their first public offering this year, Vision Fund CEO Rajeev Misra said in a call in November with the boutique research firm New Street Research said. Mr. Sun said its funds could together deliver 10 to 20 IPOs a year.
SoftBank has also applied for at least four specialty acquisition companies, or SPACs, blank check companies that are first known and then find a company to take over the listing later.
Performance was not so good at SoftBank’s latest investment unit, an asset management company called SB Northstar run by Mr. Sun investing in listed technology companies. The unit, in which Mr. Sun, which has a third stake, made headlines last year when it made it a big option that the share prices of some large technology companies would rise.
People familiar with the matter at the time said these bets yielded the strong losses, and the unit traded its options late last year. Between its derivatives trading and equity investments, SB Northstar showed an investment loss of nearly ¥ 170 billion in the last quarter, according to SoftBank figures released on Monday.
Mr. Son said he was still testing Northstar, and as of Monday, it had made a profit.
Write to Phred Dvorak by [email protected]
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