Japanese investment giant SoftBank Group reported a surprise net loss of more than $3 billion in the first quarter on Tuesday after being hit by a drop in the share prices of major holdings as well as a weaker yen.
The firm has made huge bets to find and grow hot new tech ventures around the world, but that has left its earnings vulnerable to market forces.
Results have lurched between dizzying highs and lows in recent years, with China's crackdown on its tech sector taking a toll on the company.
On Tuesday it said it had lost an eye-watering 477.6 billion yen ($3.3 billion) in the three months to June, badly missing a 73-billion-yen profit forecast by analysts in a Bloomberg News survey.
The company suffered investment losses "due to declines in the share prices of Alibaba, Deutsche Telekom, and T-Mobile US", it said in a statement.
However, SoftBank's Vision Fund unit, which invests in AI-related start-ups, swung to profit after five straight quarters of losses.
Altogether, SoftBank Group invested $1.8 billion in the first quarter, with CFO Yoshimitsu Goto telling reporters they had "resumed investment nervously" following a standstill in the previous fiscal year.
Goto added they would "go on the offensive, but carefully", as shares are steadily growing.
SoftBank Group is going through a broad rethink to restore its financial health after taking a heavy hit from global economic disruptions caused by the pandemic.
It is moving to list British semiconductor firm Arm in New York while selling down its stake in Alibaba.
Arm is hoping to raise as much as $10 billion in its initial public offering, which would put its value at about $60-70 billion, according to Bloomberg, making it the largest tech listing this year.
Going public "will be a positive factor if the IPO is done in fiscal 2023, as SoftBank will sell part of its shares in Arm at some point", Hideki Yasuda, analyst at Toyo Securities, told AFP ahead of the company's announcement.
Goto was tight-lipped about the timing, only saying the "preparations are progressing smoothly".
SoftBank initially hoped to sell Arm to US chip giant Nvidia, but the $40 billion deal was scrapped over regulatory objections.
According to a report by the Financial Times last month, Nvidia is in talks to join a list of large "anchor investors" to support Arm's IPO as early as September.
SoftBank is also reportedly planning to sell almost all of its stake in e-commerce giant Alibaba.
SoftBank once held more than 30 percent of Alibaba, but it has already started offloading shares and is looking to reduce its stake to 3.8 percent, the FT reported.
