SoftBank reported its highest-ever annual loss at its Vision Fund investment arm, which lost around 3.5 trillion yen (US$27 billion) net on investments for the year that ended in March.
A lot of these losses happened because of investments in tech companies that have had massive value drops recently. Many of CEO Masayoshi Son’s chosen investments were startups and high-growth tech companies, which is riskier. But the whole aim is, of course, that if one or two of them makes it real big, then the failed investments don’t matter.
Son is known for taking big and unpredictable risks, explaining that his personality tends to “play offense,” but he said in a press conference that now it’s time for the company to go on defense. Softbank’s stock fell 8% on Thursday, bringing the year-to-date loss to 17%.
“People thought Son could make good investment decisions,” said Mio Kato, an analyst at LightStream Research who publishes on SmartKarma. “Now there is less evidence that SoftBank management’s investment decisions are good. Wirecard and WeWork are among the examples. When the environment changes, they are no longer effective.”
“In terms of personality, I do like to play offense,” said Son. But with the “pandemonium” of the pandemic and the Russian invasion of Ukraine, he said that he understands now is the time to play defense. “When it rains, you open an umbrella,” he said.