SoftBank Group Corp. founder Masayoshi Son is starting to reap the benefits of his enormous technology investments.
SoftBank on Monday reported profit for the second quarter that far exceeded the highest analyst estimate largely because of multibillion dollar gains on a handful of his many deals. Operating profit rose to ¥706 billion in the three-month period that ended in September, compared with the ¥373 billion average of analysts’ estimates compiled by Bloomberg.
Son has been remaking SoftBank from primarily a telecommunications operator into a technology investment firm with his $100 billion Vision Fund. Tech investments contributed ¥393 billion to profit in the quarter, more than the ¥313 billion in all of the other businesses combined. The company cited increased valuations of India’s online hotel startup Oyo Rooms and graphics card maker Nvidia Corp.
SoftBank’s stake in Oyo has doubled in value to about $200 million since July 2015, while shares of Nvidia rose 19 percent last quarter.
SoftBank shares climbed 29 percent from the start of the year through their peak in late September but have since given up all of those gains amid negative news and a decline in technology stocks.
The results may be overshadowed by concerns over the listing of SoftBank’s domestic telecom operations and the company’s relationship with Saudi Arabia. The company may have to revise its plan to raise ¥3 trillion via the mobile unit’s IPO next month after rival NTT Docomo Inc. said it will comply with government pressure to cut rates.
Separately, the murder of government critic Jamal Khashoggi by Saudi Arabia’s agents has triggered an international backlash, raising questions about SoftBank’s close ties to the kingdom. At a news conference Monday, Son condemned Khashoggi’s slaying but indicated he will continue to do business with Saudi Arabia.
“We were deeply saddened by the news of Mr. Khashoggi’s murder and condemn this act against humanity and also journalism and free speech. This was a horrific and deeply regrettable act,” Son said in his first comments on the killing.
However, he added: “As horrible as this event was, we cannot turn our backs on the Saudi people as we work to help them in their continued efforts to reform and modernize their society.”
Son confirmed he boycotted a high-profile Saudi investment forum last month along with dozens of global business titans after reports emerged that Khashoggi was killed in the Saudi Consulate in Turkey.
And he said he has sought explanations from senior Saudi officials over the killing, stressing: “We want to see those responsible held accountable.”
Nevertheless, he said the firm takes seriously its “obligation” to help the Saudi people “manage their financial resources and diversify their economy.”
Son finally broke his silence over the killing after the firm’s share price tumbled due to SoftBank’s close ties with the kingdom.
Nearly half of the money in the SoftBank Vision Fund comes from Saudi Arabia and there has been a pledge of another $45 billion this year.
That gives the Saudis at least an indirect role in some of the hottest companies in the tech sector, including Uber, Slack, WeWork and Nvidia.
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