The Japanese soft bank group said today, Wednesday, that operating profits in the fourth quarter of 2019 fell 99% due to losses in the $ 100 billion vision fund for the second consecutive quarter.
These negative results will likely deepen concerns about Masayoshi Son, the group's founder, in securing new funding for "Vision 2 Fund".
The Saudi-backed Ruya Fund has operating losses of 225 billion yen ($ 2.05 billion) in the fourth quarter (October to December 2019) compared to 176 billion yen a year earlier.
The profits of Softbank Group as a whole recorded 2.6 billion yen in the last three months of last year, compared to 438 billion a year earlier, according to the company that invests in technology in a stock market disclosure.
The average expectation of a number of analysts was that the group would post a profit of 345 billion yen.
Masayoshi Son's investment capabilities took a hit in the quarter between August and September after a vision fund posted an operating loss of $ 8.9 billion, after weakness in major bets such as WeWork to share office space.
Since then, jobs have shrunk at a group of companies that the fund’s portfolio includes - from the OYO hotel reservation platform to Cloud Minds robotics maker - and has come under pressure to demonstrate its long-term viability. The same fund also lost key personnel.
Major investments in SoftBank face doubts, and Technology Group shares have fallen 20% since the beginning of the year.
The Ruya Fund said it had invested $ 74.6 billion in 88 companies as of the end of last December, and that the value of those investments amounted to about eighty billion at the end of the year.
Saudi Arabia is investing $ 45 billion in a vision fund. Among the investors in this portfolio is also the Mubadala Investment Company in Abu Dhabi.
The management of the Saudi Public Investment Fund said two years ago that it had invested in fifty to sixty companies through a vision fund.