time to read 1 minutes

SoftBank is the real winner of last year’s IPO games, grabbing $8b in profitsINTL

SoftBank is the real winner of last year’s IPO games, grabbing $8b in profits

Is SoftBank (9984) the friend who makes really terrible life choices but always manages to get out of trouble, unharmed?

The Japanese conglomerate’s Vision Fund reported a record $8b in profits last year, prompted by a rally in many technology stocks in its portfolio, such as Uber and Bytedance (TikTok’s parent company).

By the way, Vision Fund is the largest tech-focused venture capital fund in the world – around 15 of its companies have debuted on the stock markets so far. Its most recent successful IPO was that of DoorDash in December 2020.

However, don’t be disillusioned by the large profit figure; it doesn’t necessarily indicate a Warren Buffet type state of Zen.

It’s not like the fund hasn’t made mistakes. Some of its most notable failures include struggling real estate tech company WeWork, in which SoftBank invested $10b, and most recently struggling construction start-up Katerra.

And let’s not forget all its losses at the hands of Masayoshi son’s, who dabbled and failed at trading derivatives at the fund’s expense.

Losses aside, the value of the Vision Fund’s gains was also bumped up by its recent sale of $2b worth of Uber shares.

why it matters
The Vision Fund may give the illusion that it's like a goose that lays golden eggs, but its recent investment endeavors were anything but. Fortunately, the appetite for tech IPOs hasn’t died off yet (the sector thrived during the pandemic). So, the investment firm’s planned IPOs for this year might be enough for investors to ignore its riskiest choices.