SoftBank dragged into the red by lower valuations of Vision Fund By Reuters

© Reuters. FILE PHOTO: The SoftBank Group Corp logo is displayed at the SoftBank World 2017 Conference in Tokyo, Japan, July 20, 2017. REUTERS / Issei Kato

By Sam Nussey

TOKYO (Reuters) -SoftBank Group Corp reported a net loss of 397 billion yen ($ 3.5 billion) for the July-September quarter, driven by a loss of $ 10 billion in investment in its Vision Fund unit while technology valuations have fallen.

As CEO Masayoshi Son describes SoftBank as a goose that lays golden eggs, referring to its stakes in startups brought to market, initial public offerings (IPOs) have plummeted and the shares of many prominent assets like the Online retailer Coupang fell during the quarter.

“The strategy of creating the perception of increased value by making things public hasn’t really worked this year,” said Kirk Bodry, analyst at Redex Research.

The depressed valuations of SoftBank’s Chinese portfolio amid a regulatory crackdown continued to lag with its stake in the $ 12 billion ride-hailing Didi, currently valued at $ 7.5 billion.

First asset of the group, the Chinese e-commerce company Ali Baba (NYSE :), fell about a third in the second quarter.

SoftBank’s quarterly net loss compared to a profit of 628 billion yen in the same period a year earlier.

The strengths of the Vision Fund include its portfolio in India with Ola carpooling and logistics company Delhivery targeting listings.

SoftBank reduced its holdings after the lock-in periods expired, while focusing on investing through its second Vision Fund which has $ 40 billion in committed capital from SoftBank itself.

SoftBank shares, which have lost about a quarter this year, closed 0.77% at 6,161 yen ahead of Monday’s earnings.

($ 1 = 113.3,500 yen)

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