(Bloomberg) — SoftBank Group Corp. shares dropped after the company reported the largest-ever quarterly profit for a Japanese company, in part because investors had been anticipating more share buybacks.Shares tumbled as much as 6.7% on Thursday, on top of a steep slide over the previous two days. Investors are skittish about whether SoftBank will keep buying back its own stock after completing a 2.5 trillion yen ($23 billion) allotment for repurchases. The company has lost more than 5 trillion yen in market value this week.“We believed that SoftBank would follow up its massive buyback with another one. But we are extremely surprised that it did not,” Atul Goyal, senior analyst at Jefferies, wrote in a research note. “Without the buyback, SoftBank stock price is likely to reflect the performance of its listed investments.”SoftBank on Wednesday reported net income of 1.93 trillion yen for the three months ended March 31, with essentially all of that coming from its investment in the newly public Coupang Inc. That’s nearly twice the 1 trillion yen tally from the next highest Japanese company, Toshiba Corp.In a presentation after results, founder Masayoshi Son argued that investors aren’t giving him credit for the value he’s creating at SoftBank. With holdings like Coupang and Alibaba Group Holding Ltd., the net asset value for the company is now north of 15,000 yen a share, he said, more than 70% higher than the current share price.“In simple terms, they’re undervalued,” Son said, pacing a stage in Tokyo with a black turtleneck and matching black blazer.SoftBank’s Vision Fund investment arm went from being the source of the biggest loss in SoftBank’s history a year ago to the main driver of earnings, with a 2.3 trillion yen profit in the March quarter. The rally in tech shares boosted Vision Fund profits to three consecutive records, raising the value of holdings in the likes of Uber Technologies Inc. and paving the way for public listings from startups such as Coupang and DoorDash Inc.“Our profit and revenue are both measured in trillions of yen, but just a year ago we had a record loss,” Son said at the briefing. “For SoftBank, profits and losses in trillions of yen are the new normal.”What’s really driven SoftBank shares though, has been its buybacks. Beginning in March of last year, Son announced he would sell assets and repurchase 2.5 trillion yen of his own stock.SoftBank said on Wednesday it has spent all of the money it has allocated — and investors have been anticipating more buybacks. But Son didn’t commit to further repurchases.“Yes, we will consider buying back our own shares,” he said, stressing there are a lot of factors that go into such a decision and it can’t just be deployed to prop up the share price.Son tried to keep the attention on his startup successes. Coupang, the South Korean e-commerce leader, contributed $24.5 billion to Vision Fund’s profit in the fourth quarter. Auto1 Group SE, a German wholesale platform for used cars which went public in February, contributed $1.8 billion of the gains, while Uber posted a $200 million loss. The Japanese conglomerate doesn’t have to sell equity holdings to book income, so most of its profits are unrealized.“The discount SoftBank is trading at, around 30%, has widened again in recent months, but it’s a far cry from the gap that Son has railed against historically,” said Kirk Boodry, an analyst at Redex Research in Tokyo. “I get his points, but the last two years have shown there can be extreme volatility in returns and little agreement on future prospects.”Son has said that SoftBank could see between 10 and 20 public listings a year. Grab Holdings Inc. will go public in the U.S by July through the largest-ever merger with a blank-check company, valuing the Southeast Asian ride-hailing and delivery giant at about $40 billion. Its Chinese counterpart Didi Chuxing has filed with the U.S. Securities and Exchange Commission for an IPO that could value the company as highly as $70 billion to $100 billion.SoftBank has a portfolio of 224 companies across three different funds as of the end of March. But tech stocks are sliding globally as investors contend with higher U.S. bond yields and concerns about stretched valuations.“We might have seen peak Vision Fund and the markets are already looking ahead,” said Justin Tang, head of Asian research at United First Partners in Singapore. “Some of the reaction is due to the buyback running out, but the correlation to the U.S. tech swoon is particularly visible.”Son did take a victory lap in touting his returns so far. He said that limited partners in the first Vision Fund now have a blended internal rate of return of 22%, compared with negative 1% a year ago. SoftBank’s own IRR for the fund is 39%, while its IRR for the second Vision Fund is 119%.SoftBank also boosted the capital committed to its Vision Fund 2 to $30 billion, up from $20 billion.Son’s controversial program of trading options cost him during the quarter. The company posted a 33 billion yen derivatives loss in the period. While the overall profit in the asset management arm was 46 billion yen in the period, the business still posted a full-year loss of 67 billion yen.SoftBank held a total of $19.9 billion of “highly liquid” securities as of the end of quarter, including a $6.2 billion investment in Amazon.com Inc., $3.2 billion in Facebook Inc. and $1 billion in Microsoft Corp. The operation is managed by its asset management subsidiary SB Northstar, where Son personally holds a 33% stake.The investments were accompanied by derivatives that amplified exposure, a strategy that triggered a backlash from investors. The fair value of SoftBank’s futures and options positions came to $1.6 billion at the end of March, compared with little over $1 billion the previous quarter and $2.7 billion the one before. Long call options on listed stocks have dwindled to $1.6 billion from $4.69 billion half a year ago and short call options on listed stocks declined to $84 million from $1.26 billion of value.During his presentation in Tokyo, Son admitted to mistakes with startups, naming specifically WeWork, Greensill and Katerra. But he argued that SoftBank’s successes have more than made up for such missteps. He said his attitude hasn’t changed that much from a record loss a year ago to a record profit now.“I’m not overjoyed or depressed so easily, just stay calm,” he said(Updates with more context from second graph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.