SoftBank Books a Loss of $6 billion. Its Biggest Hope is the Chip Company Arm.

February 8, 2023

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Almost $6 billion was lost by Japanese investment vehicles at the end of last year, putting SoftBank Group in the red.

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An approximately $5.5 billion loss was posted by Vision Funds, a subsidiary of the technology conglomerate. The division, which manages the largest venture capital portfolio ever, has lost a fourth consecutive quarter.

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A rarely seen executive, SoftBank's CEO Masayoshi Son (ticker: JAPAN.9984) did not attend the company's earnings briefing on Tuesday, breaking with tradition.

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Announcing his decision to step down from public speaking in November, Son said that he wanted to focus on SoftBank's ownership of British chipmaker Arm and the company's preparations for an IPO. An IPO could boost SoftBank's prospects and contribute to its growth.

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With its American depositary receipts trading at less than half of their peak in 2021, SoftBank's fortunes have waned with those of the technology sector over the last 18 months. During the trading day on Tuesday, ADRs declined by more than 4%.

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There is no clear estimate of Arm's current value. In 2021, SoftBank and Nvidia (NVDA) reached a tentative agreement to sell the business to each other at an initial value of $38 billion before regulatory objections halted the deal.

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Stocks of Semiconductor companies have fallen with the tech sector as a whole since Arm's sale was announced, but the company is growing. The company's revenue rose 28% to $746 million in the December quarter compared to the same period last year.

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A March 2024 IPO of Arm is being prepared, according to Chief Financial Officer Yoshimitsu Goto. As the company faces fierce competition from New York and London stock markets, it has not yet decided where to list Arm.

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Tuesday's stock closing in Tokyo was down 1.0%. Despite reducing the pace of investment in Vision Funds, the company didn't announce a new stock buyback.

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Compared to the same quarter last year, SoftBank Group lost 783.415 billion yen or $5.91 billion.