TOKYO -- Masayoshi Son, SoftBank Group's chairman and CEO, hit back at Vision Fund critics on Monday and reaffirmed his faith in the tech investment vehicle after a big rebound in valuations kept SoftBank on track for a record annual profit.
SoftBank announced a net profit of 1.17 trillion yen ($11 billion) for the quarter ended in December, thanks to rising valuations on some of its investments. The result brought its cumulative profit to a record 3 trillion yen for the April-December period, a dramatic turnaround from its biggest loss in history for the year ended in March 2020.
"Only one year ago, everyone said the Vision Fund only lays rotten eggs," Son said at a news conference in Tokyo. The Vision Fund posted a 1.1 trillion yen investment loss for the quarter ended in March last year but swung to a gain of 2.7 trillion yen for the following three quarters, driven by a jump in share prices of portfolio companies after they went public.
"Most of the eggs actually came out in a golden color," Son said. Toward the end of his presentation, he showed an animation of a goose laying golden eggs with classical music playing in the background.
DoorDash, the U.S. food delivery company backed by the Vision Fund, jumped in value when it went public in December, delivering a handsome paper profit for the fund. Shares of U.S. ride-hailing company Uber Technologies have also rebounded. The two companies accounted for about two-thirds of the 3 trillion yen in listed shares that the Vision Fund held.
Profits from the Vision Fund helped SoftBank to offset a 113 billion yen loss on its investments in publicly traded stocks, made through its asset management arm, SB Northstar. It was hit with 285 billion yen in derivative-related losses.
The unit held $22 billion in stocks as of December, including about $7.4 billion in Amazon shares.
Son said SB Northstar "is still in test operation" and did not have a meaningful impact on the company's overall financial performance. "We were managing [cash] with listed stocks as a buffer. But if Vision Fund deals ramp up, the Vision Fund will be a priority in terms of how we use capital," he said.
The second Vision Fund, which so far is funded entirely by SoftBank, has invested in 28 companies, with another 11 deals in the pipeline.
Although the Vision Fund has sold some of its shares in Uber, Slack Technologies and other portfolio companies, Son brushed off concerns over a bubble and said he was bullish on his prospects for artificial intelligence.
"The important thing is that the AI revolution has just begun. It is an opportunity if [the market] goes down, and it is not a peak even if it goes up," he said.
Son brushed off concerns over other parts of his portfolio, including growing scrutiny against Chinese internet giant Alibaba Group Holding -- where SoftBank holds a stake of around 25% -- as well as regulatory review for a planned sale of U.K. chip designer Arm to U.S. chipmaker Nvidia.
Regulations in China are "not beyond common sense," Son said, and he reaffirmed his confidence that the Arm deal will obtain approval. "There is no overlap between the businesses" of the two companies, he said.
SoftBank's stock price hit a 21-year high on Monday ahead of the results.