Softbank's travails

Having been responsible for pushing up technology start-up valuations to dizzying levels, reality is beginning to hit Softbank Group Corp and it’s Vision Fund. the Japanese investment group posted an operating loss of 704.4 billion yen (US$6.5bil) in the three months ended Sept 30. that compares with a profit of 705.7 billion yen a year earlier.

So what ails Softbank? the losses are coming largely from a decline in valuations of its investments. Softbank is said to be heavily reliant on paper profits — its stake in Vision Fund accounts for less than 15% of its holdings but the fund made up 53% of Softbank’s operating income last year. Most of that came from unrealised gains on the valuation of investments SoftBank’s Vision Fund posted a 970.3 billion yen loss in the quarter, citing a drop in valuation of investments.