SoftBank has announced impressive gains in its Vision Fund tech arm for the second fiscal quarter ending September 30, 2024. The Japanese conglomerate logged a substantial increase of 608.5 billion yen ($3.96 billion) after bouncing back to profitability in the previous quarter.
Key Drivers of Growth
The surge in gains was primarily driven by valuation increases in SoftBank Vision Fund 1. The company cited higher share prices for e-commerce firm Coupang, Chinese ride-hailing giant Didi Global, and a value boost in its investment in Bytedance. Overall, the broader Vision Fund segment recorded a gain of 373.1 billion yen, recovering from a loss of 204.3 billion yen in the first quarter.
Vision Fund Performance
While Vision Fund 1 thrived, Vision Fund 2 faced challenges, reporting a net loss of 232.6 billion yen. This was attributed to declining share prices in companies like Norwegian robotics firm AutoStore and U.S. automation tech company Symbotic.
Strategic Moves and AI Focus
SoftBank continues to benefit from its majority stake in Arm Holdings, following the successful September 2023 listing. The company is strategically repositioning itself within the booming AI sector, with significant investments such as the reported $500 million into OpenAI’s latest funding round.
Financial Highlights
The group’s net sales rose by 6% to 1.77 trillion yen, supported by significant investment gains in Alibaba and T-Mobile shares. SoftBank’s stock has risen approximately 50% year-to-date on the Tokyo Stock Exchange.
Challenges and Future Outlook
Despite strong performance, SoftBank faces pressure from activist investor Elliott Management for a substantial share buyback. The company has announced plans to repurchase 6.8% of its shares, amounting to 500 billion yen, with 153.8 billion yen already repurchased by the end of Q2.
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