Painful lessons learned: Japan’s SoftBank returns to quarterly profit

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SoftBank, the Japanese telecoms and internet group, has delivered its first quarterly profit in more than two years after a change in strategy and an end to foreign expansion helped it cut costs at the country’s biggest telecoms company by subscribers.

While its enormous Vision Fund incurred another significant quarterly loss, Japan’s SoftBank Group Corp announced its first quarterly profit in three quarters thanks to the selling of some of its interest in China’s Alibaba.

According to a source close to SoftBank, the vast Vision Fund, which changed the face of technology with its bold bets on startups, will also write down its less than $100 million holdings in the failing cryptocurrency exchange FTX.

The issues at FTX are the latest setback for Vision Fund, which has been severely hit in recent quarters by a worldwide tech downturn, forcing Masayoshi Son, the CEO of SoftBank, to drastically curtail new investments.

The portfolio value of Vision Fund’s main business continued to decline, resulting in investment losses of 1.38 trillion yen ($9.75 billion) for the three months ending September 30.

Son stated that this would be his final post-earnings briefing appearance for the “foreseeable future” and added that he was in good health. Son, whose bold bets on everything from Chinese startups to SoftBank itself have carved a trajectory entirely different from that of any other Japanese business, is synonymous with the corporation.

In SoftBank’s own second quarter, which ran from July to September, net income totaled 3.03 trillion yen. The company reported a loss of 3.16 trillion yen in the first quarter.

Days after disclosing the enormous first-quarter loss, SoftBank announced it would settle prepaid forward contracts to reduce its stake in Alibaba Group Holdings from approximately 24% to approximately 15%, and book an estimated gain of 4.6 trillion yen in the second quarter.

Some of SoftBank’s publicly traded investments, including its stakes in GoTo, Indonesia’s largest tech company, and U.S. real estate broker Compass, saw value declines in the most recent quarter, while South Korean e-commerce firm Coupang was among the gainers.

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