SoftBank warned of its biggest annual loss ever — then its share price pumped

Japanese investment giant SoftBank has warned of its biggest annual operating loss ever after its tech-focused Vision Fund bled almost $17 billion last fiscal year.

SoftBank blamed its poor performance on the “deteriorating market environment” in a shareholder letter published on Monday, albeit without explicitly naming the coronavirus pandemic.

[Read: SoftBank wants to buy back 45% of its shares to survive the coronavirus]

As a whole, SoftBank expects to report losses of more than $12.5 billion for the fiscal year ending March 31. Last year, SoftBank reported $21.4 billion in profits, as noted by the Financial Times.

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This would reportedly be the first time SoftBank has posted an operating loss in 15 years.

SoftBank’s Vision Fund is the world’s biggest tech venture fund

SoftBank attributed a major chunk of the losses to its venture fund for tech startups, Vision Fund, which is the largest of its kind in the world with more than $100 billion in capital under management.

Vision Fund, for want of a better word, is a flop. Despite its presence in tech, Barron’s found 40% of Vision Fund’s assets are tied up in transportation and logistics firms like Uber, DoorDash, Grab, and Didi — all loss-making ventures that’ve been hit hard by the coronavirus pandemic.

In fact, just 4% of Vision Fund’s cash is reportedly invested in cloud and enterprise computing.

There’s also the $14-odd billion Vision Fund pumped into the comically disastrous co-working space company WeWork; a toxic saga that’s led ousted WeWork chief exec Adam Neumann to sue SoftBank over a $3 billion rescue deal gone wrong.

Outside of Vision Fund, SoftBank expects to be down more than $7.4 billion, thanks in part to the collapse of satellite startup OneWeb, in which it invested $1.9 billion and owned 40% of its shares.

Traders have so far responded positively to SoftBank’s loss projections. Its share price was actually up more than 5% shortly after Tuesday’s open, as the wider market looks to recover from coronavirus-fueled turmoil.