After its worst quarter ever, SoftBank turns a profit on the sale of its investment in Alibaba, according to Vision Fund. Loss of 1.38 trillion yen

SoftBank Group Corp. turned a profit for the first time in three quarters after selling a sizable portion of its prized holding, Alibaba Group Holding, to raise cash at a time when the majority of its investments had lost value due to the global tech downturn.

In the three months that ended on September 30, SoftBank Group declared a net profit of 3.08 trillion yen ($21.77 billion), thanks to a $37.93 billion yen gain from the early settlement of prepaid forward contracts utilising Alibaba's shares, according to the company's regulatory filings.

According to a Bloomberg story, SoftBank's board has approved the early physical settlement of prepaid forward contracts for around 242 million American Depository Receipts. After the settlement, which was scheduled to take place in August and September, SoftBank's ownership of Alibaba would decrease from 23.7 percent at the end of June to 14.6 percent.

Contracts that are physically settled by companies forfeit the company's future stock buyback rights.

However, the Japanese conglomerate's investment arm, SoftBank's Vision Fund, continued to lose money as it recorded a loss of up to 1.38 trillion yen on its investments, hurting the business's profitability for the three months that ended in September.

In the same period a year ago, the Masayoshi Son-led investment company posted a net loss of 397 billion yen, with the Vision Fund division recording an investment loss of about 1.17 trillion yen. However, from October through December 2021, the company only managed to make a meagre $251 million profit.

However, the Japanese investment conglomerate's Vision Fund investment unit lost $50 billion over the course of the following two quarters as investors sold their shares in high-growth technology firms—the category the conglomerate favours most—amid an increase in global interest rates. Additionally, SoftBank announced job cuts at its Vision Fund offices around the world, and 150 jobs were reportedly lost in September.

However, in the July–September quarter, two of SoftBank's largest publicly traded portfolio companies—the South Korean e-commerce company Coupang Inc. and the Norwegian robotics company AutoStore Holdings—that had previously weighed on the Japanese investment conglomerate's earnings saw gains of 46% and 30%, respectively. This helped SoftBank achieve profitability.

However, SenseTime Group Inc., a Hong Kong-based artificial intelligence company, continued to lose money, falling another 37% in the quarter ending in September after previously losing 47% in the quarter ending in April.