Loading ...But those paper gains were fun while they lasted.
By Wolf Richter for WOLF STREET.
The numbers are huge: SoftBank Group said that it would book a loss of $16.7 billion (¥1.8 trillion) at its Vision Fund for its fiscal year ended March 31, stemming “from a decrease in the fair value of investments due to the deteriorating market environment.” Separately, a spokesman of the fund told Barron’s that this loss included $9.9 billion in new losses.
In November, SoftBank had already reported a loss for the quarter (ended September 30) of $9.0 billion (¥970 billion) on its tech funds, including the Vision Fund. Because the “market environment” was already deteriorating, as WeWork and some of its other investments were blowing up. No Covid-19 needed.
But for its first quarter, ended June 30, SoftBank reported that it had been able to finagle an “unrealized valuation gain” of $3.8 billion at its Vision Fund and Delta Fund, “reflecting an increase in the fair values of OYO and its affiliate, Slack, Doordash, and other investments.”
In plain English SoftBank was just inflating valuations as it went to show paper profits. And those companies and valuations have been getting ripped to shreds.