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Masayoshi Son: The Softbank boss surprises with a high loss

Photo: Neil Hall / REUTERS

Losses in the share price of important investments have caused Softbank to suffer its third quarterly loss in a row. The Japanese technology investor announced on Tuesday a loss of the equivalent of around 3.3 billion dollars because its shares in companies such as Deutsche Telekom, its US mobile phone subsidiary T-Mobile or the Chinese online retailer Alibaba have lost up to 20 percent of their value in recent months. Analysts, on the other hand, had expected a profit of about 530 million, after Softbank had made a good 22 billion dollars lousy in the same period last year.

The Group's flagship investment vehicle, the Vision Fund, on the other hand, returned to profitability and posted an investment profit of about $1.1 billion. Softbank owed this to its involvement in chip designer Arm, on whose designs virtually all smartphone chips are based. According to a media report, the company is aiming for a valuation of 60 to 70 billion dollars in the planned IPO. With proceeds of up to ten billion dollars, the debut could be the world's largest IPO of the year.

At least for the ailing Vision Fund, the results represent a turning point from analysts' point of view. The investment vehicle of Japanese tech guru Masayoshi Son (65) had accumulated billions of dollars in losses last year due to tech bets, which failed in a high interest rate environment. The fund's arithmetical investment gain is the first in five consecutive quarters of losses.

Softbank emphasized that it would continue to be cautious and selective when it comes to new investments. Currently, acquisitions have focused on artificial intelligence (AI) and areas with strong growth prospects.

Softbank, which had reduced its stake in Alibaba to offset losses from last year's crash in technology stocks, also said it had recorded an unrealized valuation loss of the equivalent of $3.864 billion on Alibaba shares. However, this was more than offset by a profit from derivatives.