vision fund: Vision Fund slide points to more pain for SoftBank’s son

Rolling valuations of the listed portfolio of Soft Bank Corp’s Group Vision Fund The united says CEO Masayoshi Son will suffer more when the group reports its April-June results on Monday, as investors splurge on the high-growth companies he favors.

Vision Fund’s public portfolio loss in Q1 could exceed $10 billion,

Research analyst Kirk Boodry estimated after falls in robotics firm AutoStore Holdings Ltd, e-commerce firm Coupang Inc and artificial intelligence firm SenseTime Group Inc, whose shares fell nearly half on the last day of June.

While visibility into Vision Fund’s private portfolio valuations is limited, writedowns contributed to Vision Fund’s record $26 billion loss reported in May as investor concerns over the outlook for high-growth stocks escalate. impacting private markets.

The scale of the revaluation was underscored when Swedish payments firm Klarna raised capital last month at a valuation 85% lower than in a funding round led by SoftBank the year before.

Private portfolio writedowns are unlikely to reflect the current low market valuations, Jefferies said analyst Atul Goyal.

CEO Son had invested quickly through the Second Vision Fundin which he has a personal stake, but pledged in May to “play defence” and rein in spending amid market turbulence caused by rising interest rates and political instability.

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The 64-year-old billionaire previously racked up personal losses betting on derivatives and publicly traded stocks through trading arm SB Northstar, which has since been closed.

The uncertainty within the tech conglomerate is compounded by the departure of a series of Son’s lieutenants. Rajeev Misra, a key architect of SoftBank’s drive to invest in early-stage startups, stepped down from managing Vision Fund 2 to launch his own fund.

The cost of insuring against a default in SoftBank’s debt and bond yields remains elevated, though below last month’s highs, and analysts point to the conglomerate’s limited funding options given portfolio weakness. .

“Within Vision Fund itself, in the public holdings that they have, they don’t really have a lot of options,” Boodry of Redex Research said.

SoftBank is leaning on its large and liquid stake in e-commerce company Alibaba Group Holding Ltd for funding. The group has now raised up to $22 billion using the shares, the Financial Times estimated.

The conglomerate is targeting an initial public offering for U.S. chip designer Arm following a failed sale to Nvidia Corp, but analysts are questioning the listing’s outlook.

SoftBank launched a 1 trillion yen ($7.5 billion) buyback last November, backing stocks that fell about half from March 2021 highs but had used more than 60% of the capital at the end of June.

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