A leading tech investor in the world has announced a profit for the first quarter since more than a full year. This was due to a windfall from T-Mobile shares and rising stock prices.
Softbank posted a net income of $6.4 billion in the third quarter, up from $5.25 billion in the previous year. Its net asset value increased by 24 percent to $135 billion.
The Japanese conglomerate said it plans to pursue new investments in artificial intelligent while “maintaining a stable financial situation”.
The numbers were a bright spot after a string of disappointing results. This was just a few months after the company successfully launched Arm on the New York Stock Exchange.
The semiconductor giant, in its second set of earnings since becoming a public company on Wednesday, reported sales of 824 million dollars for the third-quarter, which was above expectations. Its share price is up more than 90% since its IPO. Softbank has 930 million shares but cannot sell them until the end of its lock-up contract next month.
Softbank said that its original investment of 2.3 trillion yen in Arm generated returns of 4.2-times for the company. The stake now amounts to ten trillion dollars ($67 billion).
Softbank’s numbers were boosted in December by a bonus worth $7.6 billion in T-Mobile shares (488 million shares), granted as part a merger agreement with Sprint, a telecoms company that it owned a majority stake in. By market value, the combined company is the largest telco on the planet.
New funding rounds from companies in its portfolio have brought in an additional $8,2 billion in capital.
There was however a huge difference in the performance of the different funds within the group. The second Vision Fund of the group reported losses of $19.8 Billion, while Vision Fund I reported gains of 18.9 Billion, driven primarily by ByteDance’s strong performance as owner of TikTok.
SoftBank, founded by Masayoshi son, 66 years ago, is known for its billion-dollar investments in technology companies. Son was able to make a fortune by investing $20 million in Alibaba when it was a young company. The investment in Alibaba led to a series of others. Softbank investments include WeWork Greensill Capital, and FTX.
Yoshimitsu goto, SoftBank’s chief financial officer said that in November, the group “hit bottom” after recording losses of $5.2 Billion, following the bankruptcy of WeWork.
He said on Thursday that the portfolio has undergone a major transformation over the last decade, moving away from its initial money-spinner. He added, “We’ve moved away from Alibaba to focus on leading the AI Revolution with Arm as the frontrunner.”
Alibaba used to make up half of the group, but now it is only 0.02 percent. Arm accounts for 32 per cent of the total and vision funds with the respective investment portfolios account for 38 per cent.
Son predicted that artificial general intelligence (which is beyond human intelligence) will evolve in the next decade.