SoftBank Group Corp. reported on Tuesday a 97 percent tumble in quarterly profit and the collapse of a deal to sell chip designer Arm worth over $60 billion, mounting pressure on the Japanese conglomerate to support its sagging shares.

SoftBank reported that it had squeezed out a net profit of 29 billion yen ($251 million) in the October to December quarter, compared with a record 1.2 trillion yen profit booked a year earlier as its portfolio rallied.

Separately, SoftBank announced that the sale of Arm to Nvidia had fallen through amid regulatory hurdles in a major setback to its fund raising plans.

 The decision comes after US authorities filed a lawsuit seeking to block the sale and probes were launched into the deal in the United Kingdom and Europe.

The Japanese investment giant said it would recognize a $1.25 billion breakup fee that Nvidia had deposited as a profit in the fourth quarter.

After tech unicorns plunged into the “valley of the coronavirus” in the early days of the COVID-19 pandemic, SoftBank CEO Masayoshi Son rode a recovery in valuations as startups such as e-commerce firm Coupang came to market.

Now valuations are again under pressure as investors cast a skeptical eye over tech firms promising future profits and central banks move toward paring pandemic stimulus.

The Vision Fund unit posted an investment gain of 111.5 billion yen during the quarter, a sharp decrease from a 1.4 trillion yen gain a year earlier.

“Even though some of the public companies have come down in value, there have been significant follow-on funding rounds where outside institutional investors have led those rounds,” Vision Fund’s Chief Financial Officer Navneet Govil told Reuters.

Many SoftBank portfolio companies are trading below their listing price, with office-sharing firm WeWork, ridehailer Grab and used-car platform Auto1 all falling during the quarter.

The group’s exposure to China has also affected performance, as regulators take action against tech firms. Shares of e-commerce giant Alibaba, in which SoftBank has a stake, dropped a fifth in the three months to the end of December.

Such assets are used by the group for loans as it invests through its Vision Fund unit, which runs the $100 billion Vision Fund and a smaller second fund and has become the priority for the group.

Vision Fund 2, which had $51 billion in committed capital at the end of December, had invested $43.1 billion in more than 200 startups. Industry observers have noted a disconnect between frothy private markets and skepticism in public markets.

“We are seeing some healthy rebalancing... at some of the more extreme ends of the market,” Govil said. “We did turn down quite a few transactions because we thought valuations were rich.”

Portfolio companies, including sports e-commerce firm Fanatics, held funding rounds during the quarter. Vision Fund has distributed $44.2 billion to its limited partners across both funds.

The earnings come at a watershed moment for the conglomerate as senior executives exit the firm, including Chief Operating Officer Marcelo Claure , who led the restructuring of WeWork and launched the group’s Latin American-focused fund. 

The company has also seen internal turbulence recently following reports that Claure's demands for as much as $1 billion in compensation had fuelled an internal clash.

SoftBank launched a 1 trillion yen buyback in November.

Group shares closed down 0.9 percent ahead of the earnings and have lost about half since highs in March last year.

Son, who three months ago said SoftBank was in a “blizzard,” will speak at a news conference at 4:30pm local time