SoftBank’s shares jump 20% on buyback announcement

FILE PHOTO - SoftBank Corp. placard is prepared during a ceremony to mark the company's debut on the Tokyo Stock Exchange in Tokyo, Japan, December 19, 2018. REUTERS/Issei Kato/File Photo

SoftBank Group Corp stock jumped 20% on Tuesday, extending a run that began a day earlier when the Japanese tech investor announced up to $41 billion in asset sales and a record share buyback to shore up its collapsing share price.

SoftBank shares ended Monday up 19%, hitting their daily limit, after the conglomerate said in the early afternoon it would buy back up to 2 trillion yen ($18 billion) worth of shares in addition to an up to 500 billion yen purchase announced earlier this month.

Chief Executive Masayoshi Son’s foray into investing in late-stage startups via SoftBank‘s $100 billion Vision Fund has hammered the firm’s shares as major bets soured, forcing a sell-down of core parts of its portfolio and buybacks – moves long sought by investors pushing for enhanced shareholder returns.

“We would have ideally preferred such an announcement from a position of strength and not because the (SoftBank) stock came under tremendous pressure,” Jefferies analyst Atul Goyal wrote in a note, upgrading his SoftBank stock rating to “buy”.

Selling down SoftBank‘s stake in domestic wireless carrier SoftBank Corp to 50% could raise around $10 billion while retaining control of the company, Goyal wrote.

SoftBank also owns 25% of Chinese e-commerce major Alibaba Group Holding Ltd  – a stake currently worth around $120 billion.

Alibaba’s New York-listed shares have declined 17% year-to date.

A partial sale of SoftBank‘s stake is likely, a person familiar with the matter told Reuters, with shares likely to be sold into the open market rather than back to the company.

Alibaba buying back shares from SoftBank will not please its shareholders, “you are only making Masa Son happy. SoftBank wants to sell urgently but Alibaba is not in such a rush,” the person said, who was not authorized to speak with media on the matter and so declined to be identified.

Alibaba declined to comment. SoftBank did not immediately respond to a request for comment.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.