SoftBank slows new investments due to crash in its holdings of tech firms

Masayoshi Son, who is the founder of SoftBank, has informed his top executives about slowing down the new investments as he wants to go on raising cash due to a regulatory crackdown in China and the free fall of tech stocks.

These remarks were made during the recent meeting held by SoftBank to discuss the massive hit in the portfolio holding in the previous few months.

The tension is growing at SoftBank as their tech investments are at a significant fall since they had launched their first vision fund back in 2017. Along with that, the sharp rise in interest rates and the Russia Ukraine war have made a big dent in their investments.


One of the team members from SoftBank's China team has said, "The Chinese companies listed overseas have gone through a big crackdown, and there is no expectation of things going normal anytime soon." SoftBank had a massive writedown of $30bn in this quarter.

Although out of all these, some analysts also claim that SoftBank will be able to withstand the worst condition in the leadership of Masayoshi Son as they have cash holding of about $23bn, which will act as a significant backbone as it covers redemptions of bonds for at least upcoming two-three years.

The image of SoftBank got a significant hit after some of the big bets ended up being a big failure, like the decision to invest in WeWork. Which further made it hard to get new investments for the second vision fund.

The share price of SoftBank has also gone down by almost 40% in the previous year as it faced a big loss in Alibaba.

According to CB Insights Data, "SoftBank has invested in about 195 private companies out of which most of them are tech companies making it the biggest investor to do so."