Masayoshi Soo owes SoftBank about $5 billion over the Japanese tech conglomerate’s betting losses, crippling the value of the two groups’ Vision Fund shares.
A Financial Times analysis of SoftBank’s latest filings revealed that the billionaire’s massive personal liability has hit the world’s biggest tech investor hard in the past year, tumbling valuations of tech stocks and private companies.
The 65-year-old CEO and founder of Softbank said last week that he would step down from the day-to-day operations of the group. The main target will be the UK chip arm after the tech conglomerate reported a $10 billion quarterly investment loss.
Losses in SoftBank’s various investment vehicles have also added billions of dollars to Soh’s debt for the group’s tech bets. That’s because SoftBank gave him the money to invest in its tech-related fund without paying for years.
Son’s 17.25% stake in SoftBank’s $56 billion Second Vision fund was sold for $682 million at the end of September, the previous quarter. Holdings in the investment vehicle soared to $2.8 billion by the end of 2021 as valuations for startups allowed SoftBank to sell shares in portfolio companies like WeWork and AutoStore in public listings.
SoftBank has yet to collect the $2.8 billion it owes Sony for its stake in the fund. SoftBank previously reduced equity spending for the group to just $4 million by the end of 2021.
Sun also owes SoftBank $669 million for its Latin American fund, which supports startups across the continent, though the value of the fund’s shares will be reduced to $252 million.
Softbank confirmed to the FTA that the total amount owed by Softbank to Japanese executives now stands at $4.7 billion.
SoftBank shareholders are questioning its decision to sharply accelerate the pace of share buybacks, which drove shares to 12-month highs earlier this month and sent shares soaring despite headwinds. . Leak in his fundus for vision.
Son In 2020, Northstar, known for its trading of US technology stocks “Nasdaq whale”, had to bear a third of its losses. Total losses on investments in equity trading units rose to $6 billion at the end of September. While the group continues to reduce investments.
If a local hedge fund pays off large derivative bets, Son will reap about a third of the profit.
Similarly, if Vision Fund 2’s investment in a privately held technology company proves profitable, the founders of SoftBank could make a fortune without any capital. Instead, the event wiped out billions of dollars from the fortunes of Japan’s richest men.
Unlike Softbank’s $100 billion First Vision Fund, which raised $10 billion from a Middle Eastern sovereign wealth fund, the second largest technology investment vehicle has no foreign backing. The only investors are Softbank and Son, some shares are held as preferred stock before the founder.
The Second Vision Fund was among the blue-chip investors who dumped its shares in cryptocurrency exchange FTX that collapsed last week, with SoftBank’s total loss estimated at $100 million.
In both the Vision Fund 2 and the Latin America fund, Son pledged both his share of the funds and a portion of his SoftBank shares as collateral for the company’s debt. In addition to this, the billionaire founder offers personal guarantees for unpaid bills.