SoftBank books $1.3 bn loss from tech stock speculation

It is also planning to list a blank-cheque company to attract outside investment to its Vision Fund

Japan's SoftBank Group Corp on Monday reported a 131.7 billion yen ($1.27 billion) loss from speculation on tech stocks after an attempt to diversify using its cash pile backfired.

On a brighter note, however, the group also reported that the investment portfolio of its mammoth Vision Fund is no longer under water thanks to a broad upswing in tech valuations.

Vision Fund's $75 billion investment in 83 startups was worth $76.4 billion at the end of September, the company said in a filing.

SoftBank Chief Executive Masayoshi Son has dropped operating profit as a performance metric, citing the group's shift away from running businesses to tech investing.

The Japanese conglomerate has been selling down core assets such as stakes in Chinese e-commerce giant Alibaba Group Holding Ltd and domestic telco SoftBank Corp to raise cash to weather the Covid-19 pandemic.

It had used some of its cash to buy back shares as well as invest in US-listed stock and equity derivatives in an attempt to ride an uplift in tech valuations during the quarter.

The buybacks have pushed its stock price to record highs yet the persistent gap between SoftBank's market capitalisation and the value of its assets has left frustrated executives mulling plans to take the group private, Reuters reported in September.

Conversely, it is planning to list a blank-cheque company to attract outside investment to its Vision Fund, in a sign of returning confidence after a string of soured investments shook the group's earnings, a source said last month. ($1 = 103.5100 yen)