SoftBank seen returning to profit as tech stocks gain
Japan's SoftBank Group is likely to report a return to profit when it announces first-quarter earnings on Tuesday, analysts said, as its Vision Fund investing arm's portfolio of technology stocks enjoyed a rebound.
The tech investor has posted two consecutive years of loss on the slumping value of the Vision Fund portfolio and sold down its crown-jewel stake in Chinese e-commerce firm Alibaba $Alibaba(BABA.US$ Group Holding to bolster its balance sheet.
A return to profit could ease pressure on founder and CEO Masayoshi Son, who shook up the tech investing world with aggressive bets on late-stage startups but suffered a series of high-profile stumbles as investments underpeformed.
Investors will also be looking for updates on the potential blockbuster listing of portfolio chip designer Arm, which if successful would provide a further cash injection for the group and burnish Son's credentials as a farsighted tech investor.
"It's a major catalyst for the company and a very important event for tech as a whole, considering Arm's important position in semiconductors," said analyst Rolf Bulk at New Street Research.
Its Vision Fund unit has booked five consecutive quarters of investment loss after backing high-growth firms which fell out of favour with the market, forcing the conglomerate into a defensive stance to preserve cash.
"Public valuations in tech are trending up again and I would expect private valuations to follow suit," said Bulk.
Listed gainers during the quarter included food delivery company DoorDash and ride hailing business Grab Holdings.
Analysts expect a return to profit could herald an uptick in new deals. Son in June said he plans to shift to "offence mode" amid excitement over advances in artificial intelligence (AI).
Analysts have also expressed enthusiasm over Arm's prospects for expansion in data centres and in the automotive sector. Already, expectation that investment in AI will drive industry growth has boosted the market capitalisation of chipmaker Nvidia- a former Arm suitor - above $1 trillion. $NVIDIA(NVDA.US$ $Direxion Daily Semiconductor Bull 3x Shares ETF(SOXL.US$ $SoftBank Group (ADR)(SFTBY.US$
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Cookie Jar Fund 14-K: so far softbank still biggest shareholder with 13.94% holdings. no selling in last quarter. The vanguard group gobble up 12million shares in last quarter. just for info. not trying to dismiss you but friendly reminder
Btan Cookie Jar Fund: No need to remind him. He is bent on shorting. Let him feel the wrath of Baba
Cookie Jar Fund Btan: aiya, we are not in the community to attack each other.
Btan Cookie Jar Fund: Just to teach him a lesson. From us peasants to that overlord
Cookie Jar Fund Btan: what lesson? pointless
Btan Cookie Jar Fund: Life’s lesson
股勇者 : Softbank sold BABA at very low prices... I think 70s n 80s
Cookie Jar Fund 股勇者: well, at that point of time they might have better opportunities but need cash. Goldman actually sold 12million shares in march filing but vanguard took up the slack in jun filing.
MrM Cookie Jar Fund: Cannot blame SoftBank also lah. If they don’t sell, maybe really go bankrupt already. And Alibaba is the only one that they still have big profit, their other investments all still big losses. If got choice, they would have hold or at least sell when it is much higher price. At least now no more SoftBank big selling pressure.
Cookie Jar Fund MrM: Nothing wrong. Just asset reallocation. And technically when they sell alibaba its still consider realized gain