SoftBank Group Corp. is selling a minimum of 9% of its stake in SoFi Technologies Inc. The move of the Japanese conglomerate is an effort to reduce costs and curb valuation losses of its tech-focused Vision Fund Investment portfolio.
SoftBank sold roughly 5.4 million shares of SoFi Technologies on August 5, at an average price of $ 7.99, according to its filing with the US Securities and Exchange Commission on Monday. On Monday, SoftBank sold another 6.7 million shares at an average price of $ 8.17. The filing showed that a subsidiary of SoftBank had owned 83.2 million shares of SoFi Technologies as of June 30.
The news resulted in SoFi shares dropping 3.5% in extended trading on Monday. The Financial tech company’s shares have already declined 50% in 2022, trading at $7.98 in New York.
According to Bloomberg News, Chairman, and CEO of SoftBank, Masayoshi Son, revealed his plans to cut the company’s costs, including Vision Fund, after a record $23.4 billion (3.16 trillion yen) loss.
Tech Stock Meltdown and Weaker Yen
The Vision Fund portfolio got hammered by a selloff in global technology stocks in 2022. The weaker yen also resulted in SoftBank suffering a $ 6.1 billion loss in foreign exchange.
Hundreds of technology start-ups are significant unlisted investments from SoftBank’s Vision. Vision Fund is the largest global fund that invests in technology stocks. However, low market valuations have affected SoftBank’s ability to sell them and get liquidity for further investment bets. Some of Vision Fund’s holdings currently having a marked down in value are Door Dash Inc., Sense Time Group Ltd., and Coupang Inc.
The Visionfund was also affected after the market valuation of WeWork, and AutoStore Holding dropped. SoftBank sold its holding in Uber Technologies Ltd also. The ride-hailing US giant was at one time a star in its portfolio.
