The boss of Japanese investment giant Softbank has told his top team to slowdown their investments after the firm suffered from a slump in tech stocks in recent months and a regulatory clampdown in China.
Billionaire Masayoshi Son told executives at a recent meeting to ease off backing firms, the Financial Times reported, after global tech stocks have taken a battering due to a combination of soaring interest rates and the shocks of war in Ukraine.
Sources close to the firm said that Softbank weathered an estimated $30bn hit in the first quarter, but a recent rebound in some shares had closed that to around $20bn.
The firm is reportedly exploring which of its assets can be liquidated and pushing for ways to raise cash.
Analysts say a slowdown is unsurprising after a torrid period for the firm.
“The collapse of the Arm deal rounded off a string of set backs for Soft Bank,” said Susannah Streeter, equity analyst at Hargreaves Lansdown.
“It promised to have the rare hallmarks of a SoftBank investment turning to gold but it wasn’t to be. Elsewhere in the portfolio other holdings have also put in a dismal performance so it’s little surprise that Soft Bank is now reining in its spending spree, particularly given the expected march upwards of interest rates.”
Streeter said the firm looked unwilling to take the risk of more growth investment given the current “tides of uncertainty”.
Losses had been compounded by a slump in shares in Chinese firms listed overseas, one person said, warning that a turnaround was not in sight.
Turmoil in the Chinese tech stocks after a regulatory clampdown has curtailed some of Softbank’s firepower.
The firm holds a significant stake in Alibaba, and shares in the firm have tumbled over 52 per cent in the past year.
Softbank shares have also plunged nearly 40 per cent in the past 12 months.