Softbank Group Corp yesterday reported an annual net loss of US$7.2 billion after a bruising year for the tech start-up sector in which it is heavily invested.
The company said its annual net loss came to ￥970 billion (US$7.2 billion) on sales of ￥6.57 trillion, reflecting in part major losses from its Vision Fund portfolios.
The Vision Fund 1 and 2 vehicles were hit by the global tech rout, the company said in a statement.
Photo: Reuters
“Share prices of numerous public portfolio companies declined for the fiscal year amid the weakness in global stock markets, although share prices of several companies rose in the fourth quarter,” it said.
“The fair value of a wide range of private portfolio companies also decreased, reflecting markdowns of weaker-performing companies and share price declines among market comparable companies,” it added.
The two funds recorded ￥4.3 trillion in losses, Softbank said, as they took hits across a range of start-up investments, from long-struggling WeWork Inc to delivery service DoorDash Inc.
“Softbank Group’s performance very much depends on share prices,” Toyo Securities Co analyst Hideki Yasuda said ahead of the company’s announcement.
Analysts fear that more bad news might be on the cards.
RISK OF MARKDOWNS
“We believe that the private company portfolios ... are at risk of further meaningful markdowns going forward,” wrote Victor Galliano, an analyst who publishes on SmartKarma.
Vision Fund vehicles had reported losses for four straight quarters through December last year.
Meanwhile, the company’s mobile unit has declared it is joining a global race to build a version of ChatGPT, following a plethora of US and Chinese corporations and start-ups vying to roll out their own conversational bots.
Wireless unit Softbank Corp set up a new entity in March, choosing about 1,000 people to develop a Japanese-language version of ChatGPT, chief executive officer Junichi Miyakawa said during an earnings briefing on Wednesday.
He did not elaborate on the project’s goals or progress so far.
Softbank Group billionaire founder Masayoshi Son, who for years touted AI as a revolutionary force in the way we use technology, gathered a group of engineers recently and spoke about ChatGPT’s possibilities, Miyakawa said.
He did not give details.
“We are dead positive on ChatGPT,” Miyakawa said. “Most of our meetings these days touch on topics related to ChatGPT. The ChatGPT party has started.”
Additional reporting by Bloomberg
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
RSS