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SoftBank on Monday booked a record quarterly net loss due to
sliding valuations at its Vision Fund investment arm, with Chief
Executive Masayoshi Son pledging to further reduce investment
activity and cut costs.
The estimated gain announced on Wednesday includes 2.4 trillion
yen from the revaluation of shares in the Chinese e-commerce
giant and a derivative gain of 0.7 trillion yen, SoftBank said
in a filing.
The transaction "will be able to eliminate concerns about future
cash outflows, and furthermore, reduce costs associated with
these prepaid forward contracts," SoftBank said.
"These will further strengthen our defence against the severe
market environment," SoftBank added.
Son bought into Alibaba for $20 million in 2000 and the Chinese
company's growth that made it one of the world's biggest
e-commerce companies helped to burnish his tech investor
credentials.
But Alibaba has lost more than two thirds of its value from
highs in late 2020, hit by Beijing's crackdown on the tech
sector and its scrutiny of founder Jack Ma.
The SoftBank transaction is not expected to result in additional
sales of Alibaba shares on the market as the shares were hedged
at the time of the original monetisation, SoftBank said.
Ties between the two companies have weakened, with Ma leaving
SoftBank's board in 2020 and Son stepping down from Alibaba's
board the same year.
The Japanese billionaire, who has also bet on ventures such as
ridehailer Didi Global, has sought to emphasise the decreasing
size of China tech in his portfolio as market turmoil has hit
valuations and U.S.-China tensions have increased.
($1 = 134.9700 yen)
(Reporting by Sam Nussey; editing by Andrew Heavens, Jason
Neely, Louise Heavens and Barbara Lewis)
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