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UPDATE 4-SoftBank's Son hails 'golden eggs' as Vision Fund rallies

· 02/08/2021 01:26
UPDATE 4-SoftBank's Son hails 'golden eggs' as Vision Fund rallies

Q3 profit balloons more than 20 times

Reported unrealised gain of $10.7 bln in Doordash

Almost half of VF1 portfolio listed or exited

SB Northstar stakes include TSMC

Adds detail, Son comments

By Sam Nussey and Tim Kelly

- SoftBank Group Corp 9984.T Chief Executive Masayoshi Son boasted of delivering "golden eggs" on Monday, after his company's Vision Fund unit rebounded from a loss to record an 844 billion yen ($8 billion) third quarter profit.

The profit marks a sea change from a year earlier when high-profile misses such as the flopped IPO of office sharing firm WeWork and the COVID-19 pandemic forced Son to sell assets to stabilise his investing empire.

"Our vision never changed," Son told a news conference in Tokyo after his company announced its latest results. "Golden eggs are not produced by chance," he added, returning to a favoured analogy that describes SoftBank as a goose that backs fast-growing companies such as Alibaba 9988.HK that are its golden eggs.

One of Japan's wealthiest people, Son is viewed as a maverick in a business culture that generally eschews risk taking.

Rock bottom interest rates and an ebullient market that is driving tech stock gains have helped the turnaround at the Vision Fund unit.

Softbank-backed firms that went public during the quarter include selling platform Opendoor OPEN.O and food delivery app operator Doordash. DASH.N

Softbank said unrealised gains in Doordash amounted to $10.7 billion.

Son also said that the coronavirus pandemic had not slowed down the funds' activities, saying that the switch to "back to back" online meetings because of travel restrictions had helped improve management efficiency.

Almost half of the first Vision Fund's portfolio, which includes a stake in Uber Technologies UBER.N, was exited or listed at the end of December, offering liquidity to fund backers that include the sovereign wealth funds of Saudi Arabia and Abu Dhabi.

The $100 billion Vision Fund's 82 investments were valued at $90 billion, compared with their purchase price of $76.3 billion. The fund has also recorded $20.4 billion in gross gains since inception.

Vision Fund 2's 26 investments were valued at $9.3 billion compared with their purchase price of $4.3 billion.

The fund's portfolio companies held 28 funding rounds during 2020 with almost all led by investors other that SoftBank, reflecting the appetite for technology startups.

"You wouldn't say Vision Fund is laying rotten eggs," Son said.

Chinese regulators halted the bumper IPO of its Alibaba's fintech affiliate Ant in November. Son said China is becoming more concerned about antitrust and financial regulation but this is necessary for companies that will continue to grow.

Softbank's trading unit SB Northstar disclosed stakes in listed tech stocks including American Despository Receipts in Taiwan Semiconductor Manufacturing Co 2330.TW worth $22 billion at the end of December.

It recorded a 169.8 billion yen loss on its investments during the quarter.

Son said its performance had improved since the start of the year and described the unit as still being in a trial phase.

During the third quarter, Softbank Group's net profit ballooned more than 20 times to 1.17 trillion yen ($11.09 billion). That compared with an estimate of 171 billion yen from four analysts polled by Refinitiv SmartEstimate.

($1 = 105.5000 yen)

(Editing by Jacqueline Wong)

((sam.nussey@tr.com; https://twitter.com/SamNusseyRTRS; +81345632760;))