Three months ago, SoftBank CEO Masayoshi Son told investors that the conglomerate was in the midst of a “blizzard” after some of its biggest investments produced unimpressive results.
At the conglomerate’s incoming third-quarter results, investors will be desperate for good news after being disappointed by the firm’s misguided investments.
Investors have been left with a bad taste in their mouths for the type of tech startups SoftBank’s Vision Fund has placed bets on. These losses come from placing trust into companies that provided disappointing results such as India-based One97’s disastrous IPO, as well as WeWork’s valuation falling by 14% during the last quarter.
Additionally, the company’s anticipated sale of chip designer Arm Ltd. to Nvidia Corp. may be falling apart, while its chief operating officer Marcelo Claure has left the company.
In short, the organization has experienced a tumultuous few years, and now its shares are down over 12%.
While it’s difficult to pinpoint what SoftBank’s returns look like, Redex Research analyst Kirk Boodry is predicting the firm will see a $2.1 billion loss on its portfolio in the three months ending in December.
“It is hard to see how Softbank can fund share purchases without selling assets,” said Boodry. “Shares will continue to be range-bound as Softbank appears unlikely to move more aggressively on buybacks.”
Historically, Son has purchased SoftBank’s shares when they are undervalued compared to its net asset value. However, even this metric has fallen according to analysts, which could mean a worrying future for the Japanese conglomerate.
