SoftBank Reports $3.5 Billion Loss, Hit by China’s Tech Crackdown
Beijing’s moves against Alibaba, Didi and others hurt value of Japanese tech investor portfolio.
TOKYO— SoftBank Group Corp. 9984 -0.77% reported its first quarterly net loss in a year and a half after China’s stricter regulations on technology companies caused a sharp stock selloff and weighed on SoftBank’s investment portfolio.
The Japanese conglomerate, best known for its $100 billion Vision Fund and one of the world’s leading funders of Chinese startups, posted a loss of ¥398 billion, equivalent to $3.5 billion, for the quarter ended Sept. 30.
In addition to its China issues, SoftBank said a big factor in the loss was a fall in the share price of South Korean e-commerce giant Coupang Inc., one of the companies in which the Vision Fund has invested.
The results marked SoftBank’s first loss since the January-March quarter of 2020, when it recorded its worst result—nearly a $9 billion full-year loss—amid the pandemic. In the April-June 2021 quarter, the company recorded a net profit of more than $6.7 billion.
In the latest quarter, SoftBank recorded an investment loss at the Vision Fund equivalent to about $10.3 billion. That compared with a $2.5 billion gain in the April-June quarter.
SoftBank’s shares closed Monday down 0.8% at ¥6,161 before the release of the results. Shares have fallen more than 40% since the year’s peak reached in March.
Beijing has been tightening regulations on its largest tech companies this year, weighing on the value of those companies’ shares and indirectly hitting SoftBank as well.
Shares of e-commerce giant Alibaba Group Holding Ltd. , SoftBank Group’s most valuable holding, fell 35% during the July-September quarter. Shares of Chinese ride-hailing leader Didi Global Inc., in which the Vision Fund holds a stake, fell 45%.
On Nov. 1, a privacy law that will curb data collection by technology companies went into effect in China.ch investor’s portfolio