SoftBank Plans $3.4 Billion Share Buyback Amid Investor Pressure

SoftBank Group announced on Wednesday that it plans to buy back up to $3.4 billion in shares, responding in part to calls from Elliott Management and other investors to enhance its stock price. This buyback will represent up to 6.8% of its outstanding shares, with a total value of up to 500 billion yen.

Pressure from Activist Investors:

The move follows pressure from Elliott Management, which had pushed for a $15 billion share buyback program. Elliott, a prominent U.S. activist investor, had also significantly increased its stake in SoftBank to over $2 billion.

Financial Performance Update:

SoftBank reported a narrower quarterly net loss of 174.3 billion yen, compared to 477.6 billion yen in the same period a year earlier. On a different measure, the company recorded a net income of 10.5 billion yen for the period.

This improvement is part of SoftBank’s broader effort to stabilize its finances following investment challenges, including WeWork’s high-profile failure and the declining performance of some tech firms within its Vision Funds.

Financial Context and Market Conditions:

As of the end of March, SoftBank held $26 billion in cash. The company has been working to rebuild its financial stability amid significant market turbulence, particularly affecting large-cap Japanese stocks and major tech companies.

This turbulence includes the impact of unwinding yen carry trades and concerns over a potential U.S. recession. SoftBank’s shares experienced a sharp decline of nearly 20% on Monday but have since shown signs of recovery.