SoftBank reported an eye-watering quarterly loss of $24.5bn for Q2 on revenues of $11.6bn, up 6.3% YoY. This was against a $5.6bn profit in the prior year. The company posted its biggest quarterly loss, driven by the global stock market turmoil and the rapid fall of the yen. Its flagship Vision Fund posted a $17.3bn loss due to a reduction in the value of its holdings, namely Coupang, SenseTime Group, and DoorDash. Its LatAm Funds’ valuation was also marked down by $2.4bn. Further, SoftBank also booked a $6.1bn forex loss during the quarter. CEO Masayoshi Son said, “[The] Company has to resort to big cost-cutting efforts at Vision Fund. The cost-cutting efforts will have to include a reduction in headcount.” He further added that SoftBank had marked down 284 companies in its portfolio in Q2, while only 35 were marked up. The markdowns included publicly traded portfolios as well as private companies whose estimated values had dropped because of weak performance or lower comparisons. The company approved only $600mn of investments in the June quarter vs. $20.6bn the previous year. By selling Alibaba forward contracts, SoftBank raised $17bn. It is also exploring the sale of asset manager Fortress Investment Group, which was acquired in 2017. The company announced share buyback program of $3bn with a repurchase period of 1 year, started from 9 August.
SoftBank’s dollar bonds were marginally higher with its 6% Perp up 0.17 points to 95.25, yielding 11.49%.
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