In a recent earnings call, SoftBank founder Masayoshi Son (pictured 2019) said the company would enter “defense” mode as a result of the myriad headwinds that devastated the global market.
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Japanese conglomerate Softbank Group According to CLSA’s Oliver Matthew, when the company goes into “defense” mode, it could spend more on stock repurchases for the first time than investing through its groundbreaking vision fund.
Thursday softbank Recorded record loss of $ 27 billion in Vision Fund High-tech stocks have plummeted in recent months.
SoftBank founder Masayoshi Son said in a statement in his earnings announcement that the company would enter “defense” mode as a result of the myriad headwinds that have shaken global markets, from inflation concerns to the United States. Federal Reserve Raise interest rates. A high interest rate environment tends to be negative for growth stocks such as tech stocks, as future earnings will be unattractive.
Matthew, the company’s head of Asian consumers, told CNBC’s “Squawk Box Asia” on Friday.
“They started Defense Round 1 when they saw Covid start selling some of their core assets. They made a large investment in Vision Fund 2, but now they have made a large investment in Defense Round 2. Seems to be investing in. Of those investments, they will be made. “
The company’s vision fund has invested in high-growth stocks and made significant bets on companies like those from Chinese tech giants. Alibaba When Didi To a Korean e-commerce company Coupang..
“I think it’s possible for the first time to see them spending more on share buybacks than on new investments in Vision Fund 2,” Matthew said. November, Conglomerate announces plans to buy back up to 1 trillion yen ($ 7.77 billion) Treasury stock.
Public Value quotes Matthew as confused as “one of the worst drugs” of the Vision Fund, saying that much of SoftBank’s investment is “still doing very badly this quarter.” Said.Chinese ride-hailing company Under investigation by the US Securities and Exchange Commission after going public..
“They aren’t completely out of the woods, so they hear this very defensive message,” he added. “On the contrary, their stock price is [has] Obviously it was pretty weak. “
SoftBank Group stocks surged more than 12% on Friday, but fell more than 2% a week as investors avoided the following more risky assets globally: Tech stocks When Cryptocurrency..
Still, it seems that SoftBank is not the only one comparing investment in the private market.
Atule Goyal, Managing Director of Jeffreys Asia, said:
“Everything that’s happening right now … if it lasts for a year, a couple of years, yes, there are some decent bargains, and there are some companies that are ultimately focused on cash flow and profits. “Let’s do it,” Atul told CNBC’s “Street Signs Asia.” on friday. “It depends on how long this kind of market lasts and how long this dry spell for funding remains.”
— CNBC’s Arjun Kharpal contributed to this report.
