Softbank resumes profit, but keeps ‘foot on the brakes’

Expectations were high last Friday (11) for the results of Softbank, a Japanese group that is one of the largest technology investors in the world and that had been facing billions in losses, spending cuts and executive departures. But after a loss of US$ 23 billion between May and July, the company returned to profit, although its funds still recorded an investment loss of US$ 9.8 billion in the quarter ended in September – which maintains the direction of the company. manager with a firm foot on the brakes for new bets, including in Latin America.

Between July and September, Softbank invested just US$250 million in Latin America, down 90% from US$2.33 billion in the same period in 2021. In the team, reports are that there was a 20% cut of employees in the region. Of the Japanese manager’s portfolio, 5% are in Latin America.

“For new investments, we will be more selective,” Softbank founder Masayoshi Son said in a balance sheet video conference on Friday from Tokyo. The executive stressed that Softbank suffered, but that this movement occurred throughout the investment industry. “We have to be in defensive mode.”

The scenario in the world economy was challenging in 2022, with inflation and war in Ukraine, in addition to rising interest rates, Son said. This environment is affecting the performance of technology companies that promised strong growth, and their shares have plummeted in the market. That has caused Softbank to lose out over the past three quarters, prompting the fund to make adjustments worldwide, with cost cuts. Worldwide, the Japanese fund has committed a total of US$ 162.2 billion in investments in more than 470 companies.

Swing

Between July and September, Softbak’s net income was $21 billion. The gain came from the sale of shares in Chinese giant Alibaba, which Softbank has been doing in recent months to reduce its share in the retailer – from 24% to 15%. In the third quarter alone, the gain from this operation was around US$ 30 billion.

In Latin America, Softbank ended September with US$ 7.6 billion invested, with a total of 104 investments, in two funds, one launched in 2019 and the other, in 2021. Among the bets in the region are names such as Nubank, Creditas, Banco Inter, Buser and QuintoAndar. Altogether, the market value of these companies in the region amounts to US$ 6.8 billion.

In addition to the quarterly results, the video conference held by Son, founder of Sotfbank, brought as great news the information that he will leave the daily operations of the fund.

With the departure, he will start to dedicate himself to the operation of the British chip maker Arm, which is planning an IPO. “Over the next few years, I’d like to focus on Arm’s next phase of explosive growth,” said Son. “This is my last time sitting in this chair.”

Before presenting Softbank’s results, Son began his presentation denying rumors that he is sick and that he would retire. “I’m in good shape, healthy and full of energy,” said the executive.