“Defensive Mode”: Japanese Billionaire Masayoshi Son is Dumping These 8 Stocks

Published September 7, 2022 at 4:25 pm EDT Updated September 7, 2026 at 2:26 pm EDT

In this article, we discuss the 8 stocks that Japanese billionaire Masayoshi Son is dumping.

Masayoshi Son’s SoftBank Group Corp. (OTC:SFTBY) reported its highest-ever quarterly loss of over $23 billion during Q2 2022. To resurrect investor confidence and stabilize its finances to weather the global economic downturn, SoftBank Group Corp. sold significant stakes in notable companies. During the presentation following the Q2 2022 earnings release, Mr. Son revealed that he had shifted to a “defensive mode” and highlighted the importance of retaining cash by liquidating his positions. The move has been made to ensure that Softbank can fulfill the payments due at the maturity of its debts. At the end of the quarterly presentation, Mr. Son said:

“It’s definitely heavy rain. How deeply will the rain damage our asset value? We don’t know. Therefore, we cannot take too much risk.”

The billionaire’s stance reflects that he has adopted a risk aversion strategy to ensure survival during the economic downturn. However, this does not mean that Mr. Son has taken a backseat. He reassured investors that his vision was still focused and could swiftly switch to attack mode.

Mr. Son displayed showmanship during the quarterly presentation for the second quarter. He started the presentation by putting forward a painting of Tokugawa Ieyasu, a feudal shogun, who had to face significant losses in a battle due to his pride. Observers take it as a sign that Mr. Son will take a more pragmatic approach to investments in the future. The defensive stance is a complete contrast to the confident and bullish outlook presented by the founder of the Vision Fund over the years. Mr. Son has always taken an aggressive stance on his investments and has used the instrument of leverage creatively. He has often highlighted the importance of looking at the big picture in the market.

Investment Philosophy

Mr. Son observed his wealth fall by around $70 billion after the dot-com bubble crash in 2001. However, he was able to turn his fortune around after taking an early bet on Alibaba Group Holding Limited (NYSE:BABA). Experts believe that Mr. Son has a knack for converting a vision into an asset class. For instance, he placed his bet on the disruptive and visionary ride-hailing and autonomous driving industry through his stake in Uber Technologies, Inc. (NYSE:UBER). However, his mantra has come under serious attack as the technology sector has plummeted amidst rising inflation and interest rates. This has made experts question whether the investment philosophy of Masayoshi Son can only work well in a bull market with ample cash available. It must be noted that Saudi Prince Mohammad bin Salman is a key investor in the Vision Fund through Public Investment Fund (PIF), the Saudi sovereign wealth fund (SWF). When Mr. Son was touring the Middle East to pitch the Vision Fund, he increased the proposed fund size from $30 billion to $100 billion to make the fund look impressive in the eyes of prospective investors. The fund has a positive view of technology innovation and believes that the companies in its portfolio can help create synergies. It might be too early to question the philosophy of the veteran billionaire.

Significant Losses Incurred

Softbank is focused on investing in corporations belonging to different sectors ranging from energy, healthcare, financials, and technology through its Vision Fund, valued at around $100 billion as of Q2 2022. The investment arm of Softbank accumulated a loss of over $36 billion during the first half of 2022. As a result of these losses, the gains recorded by the firm during the post-pandemic period in 2021 have been wiped out. This has also caused SoftBank to cut a minimum of 20% of the employee headcount to reduce costs. Furthermore, one of the top executives of Softbank, Rajeev Misra, stepped down from his posts as the executive vice president and corporate officer. Mr. Misra was a driving force behind the rise of the Vision Fund after it was founded in 2017 and made Softbank one of the biggest tech investors globally.

With the macroeconomic conditions worsening and Softbank looking to boost its cash position, billionaire Masayoshi Son reduced the group’s stakes in several popular companies like Uber Technologies, Inc. (NYSE:UBER), Alibaba Group Holding Limited (NYSE:BABA), and Opendoor Technologies Inc. (NASDAQ:OPEN) during the second quarter of the year.

Masayoshi Son of SB Management

Our Methodology

Let’s begin our list of the eight stocks that Chairman & CEO of Softbank Group Corp, Masayoshi Son, was dumping during Q2 2022. The Japanese billionaire liquidated 100% of his stake in six of the following stocks. The companies have been ranked from the lowest to the highest in terms of the number of hedge fund holders as of the second quarter of 2022.

8. UiPath Inc. (NYSE:PATH)

Number of Hedge Fund Holders: 24

UiPath Inc. (NYSE:PATH) is a New York-based company that went public in April 2021. The company is working on bringing into use the power of automation by creating robotic process automation (RPA) software.

According to the regulatory filing on August 15, Softbank liquidated its 100% stake in UiPath Inc. during Q2 2022. The diversified investment management firm held just over 63,000 shares in the company. UiPath Inc., considered a direct competitor of Microsoft Corporation (NASDAQ:MSFT) in the field of RPA, became a part of the Softbank portfolio initially in Q3 2021.

Since the start of 2022, UiPath Inc. stock has lost over 62% of its value as the exuberant valuations of tech stocks have come under the limelight amidst a rising interest rate and inflationary environment. UiPath Inc. reported its Q2 2022 results on September 6. The company posted a non-GAAP operating loss of $11.2 million and recorded a 34% quarterly increase in operating expenses. Furthermore, UiPath Inc. recorded an EPS of -$0.02, beating the analysts’ estimate by 9 cents.

7. Guardant Health, Inc. (NASDAQ:GH)

Number of Hedge Fund Holders: 35

Guardant Health, Inc. (NASDAQ:GH) is a Palo Alto, California-based biotech company focused on treating cancer through advanced analytics, a diverse range of data sets, and patented blood tests that intend to bring cancer detection from labs to clinics.

Softbank used a creative way to gain exposure to the operations of the company by forming Guardant Health AMEA, Inc., a joint venture created in May 2018 to commercialize the liquid biopsy testing mechanism across Asia, the Middle East, and Africa (AMEA). The subsidiary had operations in 41 countries in the region. However, in June 2022, Guardant Health, Inc. announced that Softbank had decided to offload its complete stake in the subsidiary for $177.8 million. The deal was beneficial for both parties as Softbank gained access to cash, and Guardant Health managed to develop a platform to launch its products and services across the globe and improve the outcome for cancer patients.

Here’s what ClearBridge Investments said about Guardant Health, Inc. in its Q3 2021 investor letter:

“Innovation within the health care sector has long been an area of focus in the Strategy and we plan to continue to maintain a meaningful overweight to the sector. That said, we expect this will be reflected in more diversified exposures beyond therapeutics companies. Some of the emerging areas of interest include diagnostics, life science tools, labs and other related services, where we own liquid biopsy leader Guardant Health and are working to build new holdings.”

6. KE Holdings Inc. (NYSE:BEKE)

Number of Hedge Fund Holders: 37

KE Holdings Inc. (NYSE:BEKE) is a Beijing, China-based holding company representing various offline and online platforms related to real estate transactions in the Chinese market.

The Q2 2022 earnings presentation revealed that Softbank offloaded its entire $1.35 billion stake in KE Holdings Inc.. The update revealed that Mr. Son sold his stake at a discount to protect his shareholders. However, this is being seen as a negative development for the companies in which Softbank is heavily invested as the investment firm is putting the interest of its shareholders first without taking into consideration the impact on the companies.

KE Holdings Inc. raised $2.12 billion through its IPO in August 2020. Chinese real estate is facing a downturn as the government has cracked down on speculative activity to control real estate prices. The demand for housing is dwindling in the Chinese economy. During the first half of 2022, the trading volume in the housing sector of the top 15 Chinese cities fell by over 50% YoY.

KE Holdings Inc. was discussed in the Q3 2021 investor letter of Tao Value. Here’s what the firm said:

“As witnessed in the past quarter, the government intervention in Chinese private sector is elevated to an unprecedented level. Given this background, I thoroughly reviewed all our Chinese holdings and made a few changes. We exited KE holdings (ticker: BEKE), for high potential regulatory risk and the passing of the visionary founder & CEO Zuo Hui (who was a core tenet of our original thesis).”

Of the 895 hedge funds in Insider Monkey’s database, KE Holdings Inc. was held by 37 funds during Q2 2022.

5. Procore Technologies, Inc. (NYSE:PCOR)

Number of Hedge Fund Holders: 33

Procore Technologies, Inc. (NYSE:PCOR) is a Carpinteria, California-based developer of construction management software.

Procore Technologies, Inc. went public in May 2021 and raised $635 million. Softbank initiated its holding in the company in Q3 2021 and completely offloaded its stake in Q2 2022. Procore Technologies, Inc. offers construction and project management software solutions globally following a software-as-a-service (SaaS) revenue model.

Although the company is experiencing significant growth in revenue and gross profit, operating losses are rising due to higher expenses. With a recession looming around the corner, there is a strong likelihood of operating losses rising in the future. In a rising interest rate environment, loss-incurring companies like Procore Technologies, Inc. are often forced to fund their operations by raising debt and financing it at a high-interest rate.

D1 Capital Partners also reduced its stake in Procore Technologies, Inc. by 60% during Q2 2022.

In addition to Procore Technologies, Inc., billionaire Masayoshi Son has also reduced his stake in popular companies like Uber Technologies, Inc., Alibaba Group Holding Limited, and Opendoor Technologies Inc. during Q2 2022.

4. Opendoor Technologies Inc. (NASDAQ:OPEN)

Number of Hedge Fund Holders: 39

Opendoor Technologies Inc. is a California-based company that is involved in buying and selling residential real estate properties through its digital platform.

Opendoor Technologies Inc. raised $400 million from Softbank’s Vision Fund in September 2018 and made the Japanese investment firm a minority stakeholder in the company. The stock was a bet on the North American online real estate market. Opendoor Technologies Inc. is exposed to multiple real estate markets and intends to get a significant portion of the $2.3 trillion transaction value of the residential housing segment at the end of 2021. Presently, the contribution of digital platforms stands at only 1% of the total transaction value. However, rising interest rates and inflation have caused a significant dip in real estate transactions, which is not playing in favor of Opendoor Technologies Inc..

Baron Funds shared its outlook on Opendoor Technologies Inc. in its Q4 2021 investor letter. Here’s what the firm said:

“The Fund invests in secular growth and innovative businesses across all market capitalizations, with the bulk of the portfolio landing in the large-cap zone. The Fund is categorized as US Large Growth by Morningstar. As of the end of the fourth quarter, the largest market cap holding in the Fund was $2.5 trillion and the smallest was $791 million. The median market cap of the Fund was $27.5 billion. The Fund had $1.7 billion of assets under management. The Fund had investments in 63 securities. The Fund’s top 10 positions accounted for 45.4% of net assets. Fund inflows were positive for 2021.We sold Opendoor Technologies Inc. because we identified issues relating to our long-term theses in the company, and we decided to exit the positions to fund other purchases.”

As of Q2 2022, 39 hedge funds held a cumulative stake worth over $861 million in Opendoor Technologies Inc..

3. T-Mobile US, Inc. (NASDAQ:TMUS)

Number of Hedge Fund Holders: 96

T-Mobile US, Inc. (NASDAQ:TMUS) is a Bellevue, Washington-based wireless network operator in the US with a headcount of over 75,000 employees.

T-Mobile US, Inc. has been forced to reduce its employee headcount in the engineering and network divisions in a move to restructure its operations following the merger with Sprint, which closed in April 2020. The acquisition with Sprint gave Softbank a 27% stake in the merged entity. On the other hand, the stake of the parent Deutsche Telekom diluted from 62% to around 42%. However, the positive outcome of the merger and the strong performance of T-Mobile US, Inc. has made the parent company increase its stake to more than 50% again.

During Q2 2022, Softbank reduced its stake in T-Mobile US, Inc. by 34%, or 21.15 million shares, to 39.77 million shares only. Meanwhile, Deutsche Telekom has been able to increase its stake to 48.4% at the end of Q2 2022.

In its Q4 2021 investor letter, ClearBridge Investments shared its stance on T-Mobile US, Inc.:

“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”

2. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 106

Alibaba Group Holding Limited is an Hangzhou, China-based diversified technology.

The company has seen the ownership of Softbank fall to 14.6% during Q2 2022.

However, the decline in ownership would bring into use complex financial instruments known as “prepaid forward contracts,” which are considered a form of derivative contract. This move will dilute the ownership of Softbank without actually selling the shares. The contract will also save Softbank from putting 242 million shares in the public market and instead give these shares to financial institutions in return for the prepaid forward contracts. The deal is expected to generate $34 billion for the Japanese diversified giant.

Here’s what was said about Alibaba Group Holding Limited in Alger Capital’s Q2 2022 investor letter:

“Alibaba Group Holding Limited (NYSE:BABA) is a leading e-commerce and cloud computing company in China. It also serves the big data analytics, digital media and entertainment markets. Alibaba’s shares have previously suffered from concerns about heightened regulatory oversight of the Chinese internet sector by the Chinese Communist Party. additionally, many investors became concerned about the potential for U.S. exchange listed Chinese ADRs to be delisted if they failed to meet U.S financial reporting standards by 2024. The shares have since outperformed in response to statements by the Chinese government supporting stable markets and overseas listings. The Chinese government also stated that its intensified regulatory efforts aimed at tech companies may end soon. Alibaba’s first quarter earnings and revenues exceeded estimates as determined by a consensus of analysts at financial services firms and provided by FactSet. The quarterly results benefited from better direct sales and increasing marketing efficiency.”

1. Uber Technologies, Inc. (NYSE:UBER)

Number of Hedge Fund Holders: 129

Uber Technologies, Inc. is a San Francisco, California-based ride-hailing company that Softbank bought with an expectation that the company would pivot more towards autonomous driving. However, this did not come to fruition as Uber Technologies, Inc. abandoned its plans of coming up with an autonomous driving vehicle in December 2020.

Softbank initiated a position in Uber Technologies, Inc. in 2018 and again in 2019 to become one of the biggest shareholders in the company. In the same year, the Japanese conglomerate offloaded one-third of its stake in Uber Technologies, Inc.. Softbank has sold the stake in Uber Technologies, Inc. at an average share price of $41.47. Meanwhile, the shares were bought at an average price of $34.50, resulting in Softbank generating a profit on the overall investment.

ClearBridge Investments shared its outlook on Uber Technologies, Inc. in its Q3 2021 investor letter:

“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”

The number of hedge funds holding a stake in Uber Technologies, Inc. declined from 144 in Q1 2022 to 129 in Q2 2022.

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