Arab News, Thursday, Aug 8, 2019 | Zul Hijjah 7, 1440
Saudi-backed fund surges after founder’s strategy shift
Japan’s SoftBank Group Corp. raked in a better-than-expected quarterly
operating profit as it saw a leap in investing gains from its $100 billion
The group’s results have been increasingly volatile as founder and CEO Masayoshi
Son shifts focus from the predictable income of telecoms in favor of bets,
through its mega-fund, on startups with shifting valuations.
SoftBank said on Wednesday its operating profit at the Saudi-backed $100 billion
Vision Fund surged 66 percent to 397.6 billion yen for the first quarter.
The fund’s $66.3 billion investment in 81 firms is now worth $82.2 billion, the
group added, as the value of its bets in firms like hotel chain OYO and delivery
service Doordash grew.
Much of the Vision Fund’s gains are paper profits, with its unrealized gains in
the first quarter totalling 604 billion yen.
However, that was offset by 195 billion yen in unrealized losses from a drop in
value of its stake in firms like ride-hailing firm Uber that is trading below
its IPO price.
The giant technology investor’s operating profit for the first quarter was 688.8
billion yen ($6.49 billion), down 3.7 percent from a year ago when results were
propped up by a stake sale in chip designer Arm’s China business.
The latest results outstripped a 336 billion yen estimate from five analysts
compiled by Refinitiv.
The results come as SoftBank prepares to launch a second Vision Fund for which
it said last week it has secured $108 billion in pledges.
SoftBank plans to commit $38 billion to the new fund. It will be reliant on
proceeds from the first Vision Fund to bankroll the contribution.