AUS
NZ
UK
CA
USA
IND
Headlines
- SoftBank Group plans to repurchase up to $3.4 billion in shares, addressing demands from investors like Elliott Management.
- The company aims to repurchase up to 6.8% of its own shares, a move driven by the significant discount at which its market capitalization trades relative to its asset value.
- Despite a recent quarterly net loss reduction and ongoing financial challenges, including a major slump in its share price, SoftBank's stock showed a recovery after the announcement.
Japanese technology conglomerate SoftBank Group revealed on Wednesday its strategy to repurchase up to $3.4 billion in shares, a response to pressure from stakeholders including Elliott Management. This move is intended to support its stock price amid ongoing market challenges.
The decision comes as SoftBank's market capitalization remains notably below the combined value of its assets. Over the next year, the company plans to buy back up to 6.8% of its shares, equating to approximately 500 billion yen.
Elliott Management had previously urged SoftBank to implement a $15 billion share repurchase program, having built a stake in financial stocks valued at over $2 billion. This pressure highlights the ongoing expectations for the company to enhance shareholder value.
In its latest financial report, SoftBank narrowed its quarterly net loss to 174.3 billion yen from a loss of 477.6 billion yen in the same period last year. On a different metric, net income showed a positive shift with a profit of 10.5 billion yen for the quarter.
With $26 billion in cash as of the end of March, SoftBank has been working to stabilize its finances following the collapse of the office-sharing firm WeWork and the underperformance of some investments from its Vision Funds. The company has faced significant market turbulence, notably affecting large-cap Japanese stocks and major tech firms due to the unwinding of yen carry trades and fears of a U.S. recession. Despite a nearly 20% drop in its shares earlier this week, SoftBank's stock managed a 5.2% gain on Wednesday before the earnings announcement.
