On 12th May, SoftBank announced surpassing the profit records of Japan by making net profits of roughly $46 billion for the entire year.
Group's Vision Fund division generated $36.99 billion in the fourth quarter's investment profit on Coupang. This achievement placed the firm among the world's top earners following a year of heavy, unimaginable loss.
The number, which is the maximum for any Japanese firm, brings to a close an unstable year in which the software investor steered the stock market from the falls of the Covid-19 pandemic to a recent peak. And, the benefit of around $58 billion at the Vision Fund and its beneficiary was a major factor in the figures. The fund's portfolio includes several businesses that have gone public to take advantage of the growing stock market.
SoftBank also benefited from DoorDash Inc., a food delivery business that went public in December. Moreover, the public listing of Auto1 Group, Uber’s rising stock prices, and the auction of a majority stake of Sprint Corp. contributed to the appraisal. The firm has tripled the capital amount it has committed to its second Vision Fund to $30 billion. This indicates that the Group primarily concerns recent volatility in technology stocks and the wider stock market.
CEO Masayoshi Son says that he will repeat Softbank's fourth-quarter success with other yet-to-list entities in the Vision fund portfolio.
It is to keep Softbank's place among the world ruling class. He relates it to laying golden eggs. As per Navneet Govil, candidates such as Didi, the owner of TikTok, and Full Truck Alliance, a truck services company, have good sales growth, stable profit margins, and a clear route to profitability. He described these businesses as substantial investments with tremendous value to be unleashed. Govil is the Chief Financial Officer of Vision Fund.
The investment value has been bottled up in the stock market amid concerns about frothy cash flows and a surge in special purpose acquisition vehicles (SPACs). It leads to the attraction of regulatory investigation on most of Vision Fund's benefits. SoftBank distributed $22.3 billion to existing shareholders from the first $100 billion Vision Fund and the lesser second fund. The total brought the combined fair value of the two funds to $154 billion on March-end.
According to Govil, Group has increased its second fund's invested capital to $30 billion from $10 billion, representing the scope of investment prospects.
To ensure it was powerful enough to withstand the pandemic, SoftBank invested most of the previous year selling properties, purchasing shares, and stocking up on funds. In early 2020, the firm announced a deal to buy back about $23 billion of its stock in a little over a year during one of the first major actions. That was 45 percent of the company's value at the time. SoftBank announced Wednesday that the refinance is now done, as is a commitment to invest another $23 billion on debt repayment and increasing cash reserves.
Son said that if SoftBank requires additional buybacks, it will do so, but it currently has no intentions to do so. He noted, to maintain a healthy balance sheet and wanted the financial resources to pursue investment opportunities. SoftBank's stock closed at $84.25, nearly doubling its previous high.
The Vision fund now has 95 assets or plans to invest in companies, up from nearly 70 in December last. The two Vision Funds, as well as a third pool focused on Latin America, now have 224 portfolio businesses. SB Northstar, the organization's trading unit, is widening its dealmaking this week, heading a $1 billion transaction in THG, an acquisitive e-commerce company.
SoftBank has recently put up the acquisition speed after roughly a year and a half of slower deal-making, largely through its second Vision Fund. The firm is investing itself after struggling to lure external investors.