SoftBank Group is expected to report a quarterly net loss of 26.9 billion yen ($184.4 million) on Tuesday. Early-stage tech startups fell out of favor. Major portfolio firms experienced widening losses.
Analysts believe a stronger yen and the continued rise in the share price of SoftBank’s telecommunications holdings, such as T-Mobile, will partially offset the forecast downgrades. T-Mobile finished the quarter up more than 20%, close to a record high.
LSEG compiled the average of five analyst estimates, which show the net loss for the January-March quarter. This compares to net income of 231 billion yen over the same period the previous year.
The share price of portfolio companies like Swiggy and Ola Electric each fell around 40% over the period. Intense competition in the quick commerce and electric vehicle sectors has caused losses at each to balloon since their listings last year.
Nomura Securities analyst Daisaku Masuno forecasts a collective loss of around $900 million for listed companies held in SoftBank’s Vision Fund investment vehicles over the quarter.
Crunchbase data shows new venture capital investment concentrated in large established players over the quarter. Investment in earlier-stage firms, such as those in the Vision Fund 2, fell to the lowest level in five quarters.
SoftBank contributed to this trend. It made its largest spending announcements in years, including a commitment to invest between $20 billion and $30 billion in ChatGPT maker OpenAI.
In March, SoftBank also announced its purchase of chip startup Ampere Computing for $6.5 billion.
However, analysts doubt how much these planned investments in artificial intelligence will benefit its bottom line. These projects are “yet to demonstrate tangible successes and competition is fierce.”
Amir Anvarzadeh, Japan equity strategist at Asymmetric Investors, said, “SoftBank has paid a steep price for ChatGPT perhaps without fully understanding how these increasing number of AI chatbots can coexist and make money.”
Recent market uncertainty has thrown the initial public offering market into retreat. This may further weigh on valuations in SoftBank’s portfolio of unlisted companies.
Since the beginning of April, SoftBank holdings Klarna and Oyo both delayed their listings following the announcement of tariffs by U.S. President Donald Trump.
However, Paypay is currently preparing for an IPO. A SoftBank subsidiary announced this at its earnings results last week.
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