Softbank Expects Q4 Profit Rise; Vision Fund IPO Eyed

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TOKYO (Reuters) — SoftBank Group Corp. is expected to report a small rise in its fourth-quarter profit, while investors look for details on whether the conglomerate plans to monetize its almost $100 billion Vision Fund through an IPO.

SoftBank is considering taking the Saudi-backed investment fund public, a source said Friday, adding that no formal process has been started.

Following the listing of the group’s domestic telecom unit SoftBank Corp. in December, the Vision Fund is the largest segment in SoftBank’s earnings without a market valuation.

It is, however, unclear how the world’s largest technology investment fund could be listed in its current form.

SoftBank is expected to post on Thursday a 1 percent rise in operating profit to ¥156 billion ($1.41 billion) for the three months ended March, an average estimate of three analysts polled by Refinitiv shows. SoftBank has not provided a forecast and moved to new accounting standards this financial year.

The results come at a potential inflection point for the group and the Vision Fund as portfolio companies like Uber Technologies and the owner of WeWork, The We Company, prepare to list, putting a price tag on some of the conglomerate’s largest bets on unlisted start-ups.

With investors struggling to quantify Vision Fund’s growing investments amid a lack of clarity over its valuation methods, analysts think the listings could help underscore its strategy.

Uber is set to price its $10 billion IPO on May 9, seeking a valuation of up to $90 billion. That is lower than what Uber insiders had hoped for, but investors have reported strong demand for the shares.

The lower valuation comes after rival Lyft Inc.’s poor stock performance after its market debut. That reflects investor skepticism over Lyft’s path to profitability, with peers likes Uber and WeWork also heavily losing money.

In China, Sequoia Capital China, viewed as a bellwether for tech investment, is set to lay off as much as 20 percent of investment staff as a slowdown in the tech sector saps appetite for risk, two people have said.

The Vision Fund has previously profitably exited its stakes in Indian online retailer FlipKart and already-public chipmaker Nvidia Corp.


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