Investments

Rakuten Dumps $1.4B In Tech Holdings, Including Pinterest Stake

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Rakuten, the Japanese eCommerce conglomerate, has sold billions of dollars' worth in shares, including the entirety of its stake in Pinterest.

The shares were from the company's technology holdings, according to Rakuten, and the sheer amount of them raised concerns among analysts about overvaluation in the sector.

Rakuten's sales come on the heels of its operating loss of 40 billion yen, or $360 million, last quarter. Though it saw some gains in the financial technology business, it had losses when it came to ride-hailing investments, like the one it had in Spain's Cabify.

Cooling tech valuations have had a wide impact, as Rakuten's case shows — the company also had a 103 billion yen write-down of its stake in Lyft during the previous quarter.

SoftBank Group reported another loss Wednesday at its Vision Fund investment business, which had stakes in several of the world's biggest technology companies, and CEO Masayoshi Son pushed back plans for an expansion.

Rakuten's unloading of all its Pinterest shares came because of a loss of profitability in the company, which went public last April, though Pinterest had been recovering this year thus far. Rakuten, an early investor in the social media company, saw a return investment of 382 percent.

The company also sold its shares in Middle Eastern rideshare company Careem, which itself was recently bought out by Uber. Profits from the sale of Careem, along with Rakuten subsidiary Overdrive, will become available in the first quarter this year.

Rakuten CFO Kenji Hirose said the reason for the sales is that the company is looking to monetize its investments. He said the proceeds will be spent more on the company's operations, rather than investments. The company's billionaire founder, Hiroshi Mikitani, made investments with an eye towards making Rakuten into a global tech juggernaut on the scale of Amazon.

Rakuten came under scrutiny by Japan's Fair Trade Commission recently, however, for concerns regarding its free shipping policy.

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