TOKYO – SoftBank Group Corp.
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drove bullish stock markets to big quarterly profit, largely due to investment gains in its $ 100 billion Vision Fund and its $ 10 billion successor.
The Japanese technology investor said on Monday that he posted a net profit of ¥ 1.17 trillion, equivalent to about $ 11 billion, on investment gains of ¥ 1.77 trillion during the quarter ended December 31. Almost 80% of the investment gains were due to the strong performance at Vision Funds 1 and 2.
Expectations of good results pushed SoftBank’s share price up 4.4% to ¥ 9,485 on Monday – a level last seen in February 2000, when the company’s stock peaked during the Internet bubble .
“We have finally entered the harvest phase” of Vision Fund, SoftBank Chief Executive Masayoshi Son said at a news conference in Tokyo, in front of a slide showing a goose laying huge columns of golden eggs that represented the successes of SoftBank’s investment.
The results highlight how much the boom in public markets in recent months has benefited SoftBank, which over the past year has completed its metamorphosis in an investment holding of a telecommunications conglomerate. The rise in stock prices last year helped SoftBank recover from the billions of dollars in losses.
These gains continued into the last quarter, increasing the market capitalizations of Vision Funds’ listed companies – most importantly, Uber Technologies Inc.,
one of the fund’s biggest investments.
Excited public market investors also gave SoftBank an investment bonanza when Vision Fund’s portfolio company, DoorDash Inc.
listed in December. Shares in the United States food delivery company skyrocketed immediately, well above its initial public offering price. By the end of the month, DoorDash had yielded more than $ 8 billion in paper earnings to the fund, and its shares have continued to rise ever since.
SoftBank said the quarter ended in December was the best for the Vision Fund, resulting in a gain of $ 13 billion in the value of its investments.
SoftBank is prepared to continue taking advantage of strong markets this year. Half a dozen or more of Vision Fund’s advances – some of which already have multi-billion dollar valuations – are preparing initial public offerings this year, Vision Fund Chief Executive Officer Rajeev Misra said in a November conference call to research firm New Street Research. Son said that together, his funds could produce 10 to 20 IPOs a year.
SoftBank also launched or filed listing orders for at least four special purpose acquisition companies, or SPACs, blank check firms that go public first and then find a company to take over the listing later.
Performance was not as good at SoftBank’s newest investment unit, an asset management company called SB Northstar run by Son, which invests in listed technology companies. The unit, in which Son has a one-third stake, caused a sensation last year when he made a big bet on options that the stock prices of some big tech companies would rise.
Those bets generated sharp losses, and the unit ended its options trading at the end of last year, people familiar with the matter said at the time. Between its derivatives and equity investments, SB Northstar posted an investment loss of almost ¥ 170 billion in the last quarter, according to SoftBank figures released Monday.
Son said he was still testing the Northstar and that on Monday he was recording gains.
Write to Phred Dvorak at [email protected]
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