Global markets have turned volatile and the uncertainty has also struck SoftBank, whose CFO Yoshimitsu Goto is trying to balance caution and calculated boldness.
“The day before yesterday [saw] the biggest dip [in the stock market] in history, and yesterday was the biggest rise in history…..the market is so volatile, and we are, of course, cautious,” Goto remarked in the post-earnings call for April-June 2024 quarter, reflecting on the dramatic swings in the Japanese market this week.
On August 5, the Nikkei 225 index suffered its largest single-day point drop since the 1987 Black Monday crash, plummeting 12.4%. The following day, the index rebounded sharply, jumping 10.23% to close at 34,160.79 points.
With a robust cash position of ¥4.3 trillion ($32 billion), SoftBank finds itself well-equipped to navigate these choppy waters.
“We already have such financial healthiness… We want to make new investments and also focus on returns to shareholders,” Goto explained, highlighting a delicate balance between seizing new opportunities and rewarding investor loyalty through measures like the recently announced ¥500 billion ($3.4 billion) share buyback.
Drawing historical parallels, Goto likened today’s environment to the post-dot-com bubble era.
“When the dot-com bubble burst, the leading companies back then were Amazon, Microsoft, and Google… Now, those companies are the top 10 in terms of market cap,” he observed, underscoring the potential for transformative growth in AI.
In the April-June 2024 quarter, SoftBank Group earned a modest profit driven by solid valuations of its top private tech investments.
The Japanese conglomerate reported a net profit of ¥10.46 billion ($70 million) for the latest quarter. While this figure is notably lower than the ¥328.9 billion ($2.11 billion) profit reported in the previous quarter (Q4 of the previous fiscal year), it represents the third consecutive quarter of profitability for the company, reversing the losses it faced in the two preceding fiscal years.
