At the beginning of the press conference, Japanese technology investor Masayoshi Son shows an image of warlord Tokugawa Ieyasu. It shows the later ruler of Japan after a defeat in battle, grim and dejected. Son says he wants to take a good look at the Shogun’s image to learn from his mistakes – and turn the tide. The crisis in technology stocks brought the founder of the Softbank Group the biggest quarterly loss in the company’s almost 40-year history. From April to June there was a deficit of the equivalent of almost 23 billion euros. In the same period last year there was still a profit of around 5.5 billion euros on the balance sheet.
“Of course the market was bad, there was war and there was the corona virus. We can give a lot of reasons, but they are all just excuses,” says Son, who himself was known 20 years ago as “the shogun among Nippon’s cyber samurai”. was hyped. He spent too much too carelessly. The investor has interests in hundreds of companies around the world through its two vision funds. For a long time, the motto was: missed opportunities are worse than mistakes. In recent years, Son has benefited from and fueled the hype surrounding technology start-ups. Softbank was able to cash in heavily on numerous profitable IPOs. However, even then he fell flat on his face with investments such as the real estate service provider WeWork.
Now the tide has finally turned. High inflation makes business and IPOs more difficult. The stricter regulation of technology companies, for example in China, is affecting company shares. Sons Funds came in in the past quarter on a minus of more than 21 billion euros, wiped out all gains from the previous quarter. The biggest loser was the South Korean online retailer Coupang with a loss of a good 2.1 billion euros. The stakes in the US delivery service Doordash and the Chinese facial recognition company Sensetime each lost around 1.6 billion euros.
British computer chip designer Arm’s IPO is expected to raise billions
Son has devalued the non-exchange funded companies, which include the Swedish payment service Klarna, the Chinese parent company of the video app Tiktok, Bytedance, and the Berlin tourism platform Getyourguide, by more than eight billion dollars. However, experts assume that this does not yet reflect the current valuation weakness in the tech industry.
Softbank is now banking on an imminent IPO of British computer chip designer Arm, which is expected to bring in billions. In the meantime, the sale to the US competitor Nvidia was planned, which failed due to competition watchdogs. The Japanese are also the second largest shareholder in Deutsche Telekom after the federal government. The Bonn-based company is aiming for a majority in the US mobile operator T-Mobile US and wants to buy more shares in the US company from Softbank.
So that money does not run out, Softbank has sold investment options in the double-digit billion range to the Chinese technology group Alibaba. Son also announced an austerity program. This also includes reducing the workforce. The “cyber shogun” is bracing for more defeats in the coming months before he can conquer markets again.