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SoftBank to gain $34 billion from cutting Alibaba stake to 14.6% from 23.7%. Source: Yahoo News Singapore

SoftBank stocks tumble as Vision Fund post back to back loss

Japan-based multinational financial and investment company SoftBank Group is witnessing a severe crisis as stocks of the company tumbled by more than 11 percent on Monday.

This decrease in share price comes after the company reported huge financial losses for the investment arm of SoftBank Group, Vision Funds. Vision Fund of SoftBank is posting losses for the third quarter in a row smashing down the confidence of investors and traders in the stock. The Vision Fund logged investment losses of 1.38 trillion yen ($9.9 billion) in the three months to Sept. 30 as the value of its portfolio continued to slide.

During the morning session of stock trading on Monday, the stocks were down by nearly 11.2 percent. This trend will result in one of the biggest one-day losses for SoftBank in more than 2 and a half years.

But the company as a whole posted a profit in the last quarter by breaking the losing streak of three quarters.

Analysts also have an opinion that this correction in stock prices is temporary as the stock had witnessed huge rallies since last year. The stocks have gone up multiple times at record rates due to the share repurchase announcement made by SoftBank Group. Investors had pumped more funds into the company expecting another round of share repurchase from the investment company.

The coronavirus pandemic in 2020 and the resultant lockdown severely impacted the financial performance of companies and startups supported by SoftBank Group. As countries started to move out of lockdown and economies began recovering, the financial company had predicted huge growth in 2022 and 2023. The predictions were made by founder and CEO Masayoshi Son himself.

SoftBank Group Corp. Chairman and Chief Executive Officer Masayoshi Son speaks during a press conference
Softbank Chairman Masayoshi Son
(Photo by Tomohiro Ohsumi via Getty Images)

All the plans went wrong as the Russian special military operation in Ukraine triggered an economic crisis in all major economies. High fuel prices and the supply chain crisis caused high prices among essential commodities . Inflation skyrocketed in various economies forcing companies, especially tech companies to cut costs and reduce expenses.

Reduced spending by customers in inflation-hit economies also severely drained the financial health of companies and new-age ventures.

Due to draining resources and high volatility in the macroeconomic condition, SoftBank Group CEO Masayoshi Son a few months ago announced that the company will slow down additional new investments in the startup sector. The announcement had deep impacts on fundraising plans of various startups based in India.