SoftBank Group Corp on Wednesday swung to a loss of 369.16 billion yen ($2.4 billion) in the third quarter of FY24 as shares of some of its top portfolio companies declined sharply during the period.
The company’s Vision Fund investments clocked a loss of 352.75 billion yen ($ 2.29 billion) for the quarter ended December 31. The Vision Funds investments had posted a gain for the preceding two quarters.
Vision fund
SoftBank's Vision Funds continued to see a divergence in fortunes in the October-December period. While its first fund (SVF1) posted a $4.8 billion investment gain between April to December period, its second fund (SVF2) remained deep in the red and recorded a $2.9 billion investment loss, regulatory filings showed.
Both the funds sold investments totalling $2.98 billion during the period, including DoorDash and SenseTime, and partial exits from several others.
The mixed bag of results reflects volatility in public and private holdings for SoftBank. In India, while Ola Electric’s declining stock price weighed on its SVF2's performance, Swiggy’s recent IPO provided some relief, results showed.
To be sure, SoftBank continues to hold its over 170 million shares in Swiggy as it opted out of diluting its stake during the offer for sale (OFS) transactions during the IPO last year.
SVF2, which has struggled to replicate the success of SVF1, reported cumulative returns of $33 billion on $55.2 billion in investments, meaning an overall $22.2 billion gross loss since inception in 2019. The fund's 3.7% decline in fair value QoQ was primarily driven by a 4.2% drop in public portfolio companies, with Ola Electric and AutoStore seeing notable declines.
Swiggy’s stock, however, surged after its IPO, helping offset some of these losses.
"The fair value of investments held at the third quarter-end decreased by 3.7% from the previous quarter-end. Down 4.2% QoQ for public portfolio companies, mainly due to decreases in the share prices of investments such as Ola Electric Mobility and AutoStore, despite an increase in Swiggy’s share price following its listing in November 2024," the company said on February 12.
On the other hand, SVF1 had a gross gain of $21.6 billion since its inception in 2017.
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