By Phred Dvorak
TOKYO-- SoftBank Group Corp. rode red-hot stock markets to a big quarterly profit, largely on the back of investment gains at its $100 billion Vision Fund and its $10 billion successor.
The Japanese technology investor said Monday that it posted a net profit of Yen1.17 trillion, equivalent to about $11 billion, on investment gains of Yen1.77 trillion during the quarter ended Dec. 31. Nearly 80% of the investment gains were due to strong performance at Vision Funds 1 and 2.
Anticipation of strong results pushed SoftBank's stock price up 4.4% to Yen9,485 Monday--a level last seen in February 2000, when the company's shares peaked during the internet bubble.
"We've finally entered the harvest phase" for the Vision Fund, SoftBank Chief Executive Masayoshi Son said at a Tokyo news conference, standing in front of a slide showing a goose laying towering columns of golden eggs that represented SoftBank's investment hits.
The results highlight how much the boom in public markets over the last several months has benefited SoftBank, which during the past year completed its metamorphosis into an investment holding company from a telecommunications conglomerate. Climbing share prices last year helped SoftBank claw its way back into the black from a multibillion-dollar loss.
Those gains continued in the latest quarter, pushing up the market capitalizations of the Vision Funds' listed companies--most importantly ride-hailing company Uber Technologies Inc., one of the fund's biggest investments.
Enthusiastic public-market investors also gave SoftBank an investment bonanza when Vision Fund portfolio company DoorDash Inc. listed in December. Shares of the U.S. food-delivery company immediately soared well above their initial public offering price. By the end of the month, DoorDash had earned the fund more than $8 billion in paper gains, and its shares have continued to rise since.
SoftBank said the quarter ended December was the Vision Fund's best ever, resulting in a $13 billion gain in the value of its investments.
SoftBank is poised to continue taking advantage of strong markets this year. Half a dozen or more of the Vision Fund's investees--some of which already have multibillion-dollar valuations--are readying initial public offerings this year, Vision Fund Chief Executive Rajeev Misra said on a November call with boutique research firm New Street Research. Mr. Son said that together his funds could produce 10 to 20 IPOs a year.
SoftBank has also rolled out or filed listing applications for at least four special-purpose acquisition companies, or SPACs, blank-check firms that go public first and then find a company to take over the listing later.
Performance wasn't so good at SoftBank's newest investment unit, an asset-management firm named SB Northstar run by Mr. Son that invests in listed tech companies. The unit, in which Mr. Son has a one-third stake, made waves last year when it made a big options bet that the stock prices of some large tech companies would go up.
Those bets racked up steep losses, and the unit wound down its options trades at the end of last year, people familiar with the matter said at the time. Between its derivatives trades and stock investments, SB Northstar posted an investment loss of almost Yen170 billion in the latest quarter, according to SoftBank figures released Monday.
Mr. Son said he was still testing out Northstar and as of Monday it was posting gains.
Write to Phred Dvorak at email@example.com