Market Analysis

SoftBank Posts Unexpected $2.4 Billion Loss as Investments Decline

Amos Simanungkalit · 12 Feb47K Views

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SoftBank Group reported an unexpected net loss of 369.2 billion yen ($2.4 billion) for the October-December quarter, primarily due to declining valuations at its Vision Fund. The company faced unrealized losses from investments in South Korean e-commerce platform Coupang, Chinese ride-hailing firm Didi Global, and AutoStore Holdings.

This loss has raised concerns about how SoftBank will finance its ambitious $40 billion investment in OpenAI, including a substantial $25 billion stake that was initially reported in January. The cash balance dropped to 4.7 trillion yen ($30.6 billion) by the end of December, down from 6.2 trillion yen in March, signaling a decrease in available liquidity.

SoftBank has also pledged $15 billion toward Stargate, a venture with OpenAI and Oracle to build AI data centers in the U.S., which has received backing from U.S. President Donald Trump. These moves represent a return to SoftBank's aggressive investment strategy, reminiscent of its earlier bold bets through the Vision Funds.

The third-quarter results contrast sharply with an analyst consensus of a 234 billion yen net profit and a substantial 950 billion yen profit in the same period last year. Vision Fund's loss of 352.7 billion yen broke a streak of two consecutive profitable quarters. Vision Fund 1 has earned $21.6 billion since its launch in 2017, but Vision Fund 2, focusing on earlier-stage startups, has posted a $22.2 billion loss since 2019.