Summary:
- SoftBank Announces 6.8% Share Buyback Amid Market Disparity
- New Plan Falls Short of Activist Investor Elliott’s $15 Billion Push
- SoftBank Reports Losses for Q1, But Achieves Modest Profit and Vision Fund Gain
Masayoshi Son’s SoftBank is set to buy back up to 6.8% of its shares over the next year, aiming to address its market capitalization disparity with its portfolio value. This move comes as SoftBank navigates a more cautious approach to artificial intelligence investments while recovering from a recent net loss for April-June.
The new buyback plan, though significant, is smaller than previous efforts, including the 2.5 trillion yen ($17 billion) buyback from 2020. Activist investor Elliott Management had advocated for a $15 billion buyback, and holds a position in SoftBank valued over $2 billion.
CFO Yoshimitsu Goto stated that the decision for this new buyback was carefully considered by the board, emphasizing it as beneficial for the company.
Furthermore, he said it’s certainly possible that we may decide on another share buyback programme at some point in the future; and that shareholder return is always a main theme of discussion among the board of directors.
Goto emphasized that the buyback decision was made independently of external pressures, stating, “SoftBank is not the kind of company to make decisions based on the influence of an individual party.”
In the first quarter, SoftBank reported a loss of 174.3 billion yen, which was about one-third of the previous year’s loss but fell short of the LSEG consensus estimate of a 104.7 billion yen profit. This loss was impacted by increased taxes.
On a different measure, SoftBank achieved a modest net income of 10.5 billion yen for the period. Additionally, its Vision Fund investment unit realized a 1.9 billion yen gain, reversing the 58 billion yen loss recorded in the prior quarter.
Source: AZ News, Reuters.
