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The annual results from Masayoshi Son’s SoftBank Group are in, and they’re not good. They’re disastrous.

Even for a company that was widely expected to have a bad year, its results for the 12 months ended 31 March were gasp-inducing. The segment housing its Vision Funds swung to a loss of $20.5 billion. For the group as a whole, its $13.3 billion net loss was the second-worst annual shortfall ever by a Japanese company, as reported by Kyodo News.

The big question for founder Masayoshi Son after this rout is this: Can the world’s largest venture capital fund survive in an era where money is no longer free?

Son’s many critics, particularly those from the WeWork drubbing era, may be rubbing their hands in glee for being correct, particularly delighted to learn that he himself is on the hook for $2.4 billion from the firm’s stock-trading programme.

But still, it’s too soon for Softbank’s detractors to celebrate their foresight on where it was headed, for Son has survived bigger challenges than this in the past and his investment acumen cannot so easily be written off.

Son called for patience by pointing, as he regularly does, to his previous travails — and how he overcame them. Recall that after the collapse of the dotcom boom two decades ago, SoftBank’s market value collapsed in a pattern that looks eerily similar to that of the last few years. Like now, Son then drew the ire of investors who had bought in at the peak.

“My nickname back then became the ‘bald fraud’," Son said in Tokyo on Thursday, with a self-deprecating laugh. “While it’s true that I’m balding, I believe I’m no charlatan."

Masayoshi Son has certainly weathered financial storms in the past. Exactly two years ago, amid the market panic of the pandemic, Son struck an even more cautious tone, pausing dividend payments, something that he has declined to do now. The following year saw rebounds and record profits.

Son’s not one to be thrown off-course by a bad quarter, or even a bad year. “When it rains, you open an umbrella," he told Thursday’s briefing meet, suggesting the current market rout is just a passing shower as far as he’s concerned. And critics have predicted multiple times in the past that his firm would be washed out. From the acquisition of Vodafone Group’s Japan operations in the mid-2000s that got Son into the mobile phone business, to his purchase of Sprint, at the time the largest-ever overseas acquisition by a Japanese company, much less WeWork, the reports of SoftBank’s death as an investment pwoerhouse have been greatly exaggerated.

The cuts from WeWork were deep, but not fatal. And the damage was overstated, perhaps because of WeWork’s familiarity to investors in the West. But many of Son’s successes get less press, such as his $2.2 billion investment in South Korea’s Coupang that is still $6 billion in the black even after its recent plunge. The firm has captured much of the payments market in Japan, the world’s third-largest economy, with its PayPay operation, which is expected to go public in the next few years.

An era of interest-rate increases means that times are changing, but they’re not lethal to SoftBank’s ambitions. Ventures will still need capital. New opportunities will still arise. To meet them, Son unveiled a two-part strategy of defence and offence. The bad news for dog-walking startups and candy-delivery firms is that SoftBank’s easy-money spigot is being turned to ‘off’, with Son promising to be more selective with Softbank’s future investments, particularly in China.

Son also promised to have in cash twice the amount needed for the next two years of bond payments. Money is still cheap in Japan, even if the weakening yen means yen-denominated overseas purchases will look pricier.

Perhaps more concerningly, in the column marked ‘offence’, there is seemingly just one hope: Arm Ltd. Son seemed to be putting a lot of eggs in the basket marked for the British chip designer, a firm he seems positively giddy over since the sale to Nvidia collapsed earlier this year. But it’s far from certain that Son can bring Arm to a successful listing, particularly in the current environment. Choosing the right time to list such an asset will be tricky.

In the short-term, though, things are only likely to get worse. SoftBank’s fiscal year ends in March, meaning tech’s extended losses in April and May will be reflected only in its next quarter results. As investments dry up, we might even hear less from Son in the next few years. A time on the sidelines would be no bad thing for one of the tech world’s biggest investors. Maybe his plan should be: speak softly and carry a big umbrella.

Gearoid Reidy is a Bloomberg News senior editor covering Japan.

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