SoftBank Goes Defensive On Investments Following Tech Meltdown

  • SoftBank Group Corp SFTBY SFTBF founder Masayoshi Son looked to slow down investments to raise cash amid the tech stock meltdown and China's regulatory crackdown the Financial Times reports.
  • Rising interest rates and the Ukraine crisis have ravaged its holdings. 
  • SoftBank also suffered due to considerable holding in Alibaba Group Holding Ltd BABA and DiDi Global Inc DIDI, which continued to attract regulatory crackdown.
  • The estimated writedown for this quarter stood at $30 billion. However, a recent uptick in some shares led to a writedown of ~$20 billion. 
  • SoftBank used stock in Coupang Inc CPNG and other significant holdings in the Vision Fund as collateral for loans. It finalized loans worth $10 billion tied to the IPO of U.K. chip designer Arm Holdings. 
  • Son owned about a third of SoftBank and borrowed against his stake to personally invest in Vision Fund. 
  • Son was very concerned about the rising collateral
  • SoftBank made investments in 195 private companies in 2021.
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