With Losses At Its Investment Unit Rising, Japanese Conglomerate Softbank Sells Its Entire Share In Uber

SoftBank has confirmed that it has sold its remaining share in Uber, the ride-hailing behemoth based in the United States, as the Japanese conglomerate seeks to raise funds amid rising losses at its investment subsidiary.

SoftBank’s Vision Fund, its technological investment vehicle, announced a 2.93 trillion Japanese yen ($21.68 billion) loss for the June quarter, one of the largest on record.

SoftBank stated that it sold its Uber stake between April and July for an average price of $41.47 per share. SoftBank stated that the average cost per share was $34.50, implying that the business profited on the sale of its Uber shareholding.

The Japanese conglomerate did not disclose the amount of money it received from the sale of Uber, nor the size of the share it acquired.

SoftBank made two investments in Uber in 2018 and 2019, becoming the company’s largest stakeholder at one time. According to sources, SoftBank sold nearly a third of its interest in Uber last year. It has now divested itself of any remaining shares.

Uber’s stock fell 0.5 per cent on Monday.

SoftBank reported a $5.6 billion realised gain on total holdings in companies it sold between April and July, including Uber, online real estate firm Opendoor, health care provider Guardant, and Chinese real estate and brokerage behemoth Beike.

SoftBank made an investment in Uber in 2018 and was previously the company’s largest stakeholder.

However, the Japanese conglomerate has been losing money at its Vision Fund investing subsidiary and has been selling stock in firms to obtain funds.

SoftBank made an investment in Uber in 2018 and was previously the company’s largest stakeholder. However, the Japanese conglomerate has been losing money at its Vision Fund investing subsidiary and has been selling stock in firms to obtain funds.

SoftBank’s Vision Fund investing firm lost money in the first half of the year as technology companies fell substantially as central banks around the world raised interest rates in response to rising inflation. Some of its interests, including as South Korean e-commerce giant Coupang and US meal delivery startup DoorDash, have seen significant declines this year.

SoftBank CEO Masayoshi Son said earlier this year that the company would go into “defensive” mode following a record loss at the Vision Fund. Part of that strategy entails selling off some of its interests in order to improve its cash position.

SoftBank raised $10.49 billion in the June quarter by selling Alibaba shares through a derivative known as a forward contract.

Son made his riches more than two decades ago with an early investment in Alibaba. Before months of regulatory tightening by Beijing wiped billions off the shares, the Chinese e-commerce behemoth climbed to become one of the world’s most valuable corporations.

(Adapted from CNBC.com)



Categories: Economy & Finance, Entrepreneurship, Strategy, Sustainability

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