Vision Fund, a sub-group of SoftBank, posted a loss of $21.6 billion in the second quarter of 2022, the second time in its history to have taken such a huge blow.
The company is an investment management group that invests in tech stocks and the falling shares in the industry hit it hard. Since its founding in 2017, Vision Fund has raised $154 billion in capital, split between the original sub-group and a newer one called SoftBank Vison Fund 2.
While the first Vision Fund was still mainly focused on innovative tech startups, the second was more into the budding AI industry. You may recall the embarrassment that Wework caused the investment group after its IPO failure in 2020.
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The Q2 2022 loss was not entirely shocking as there were already signs that the shares it held were underperforming. As CNBC mentioned in its report, the company’s founder, Masayoshi Son, had revealed in May 2022 that Vision Fund was going into defense mode with a conservative outlook. Yet, it was not enough to stop the loss. Perhaps, it would have been bigger without the move.
In a statement, the company blamed its ill-fortune on ‘the global downward trend in share prices’ which is causing causing economic recession. Also, there are inflation and rising interest rates concerns, which hit tech startups with high-growth stocks.
SoftBank added that its public companies like Coupang and DoorDash suffered losses as well as its private companies. Beyond the defense mode that Son mentioned months ago, it is not clear how the multi-billion dollar company plans to fix its sinking ship.
Likely, it may also start embracing similar cost-cutting measures like layoffs and pausing hiring, if it has not already begun those quietly.
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