Japanese technology investor SoftBank Group said on Wednesday it plans to buy back a hefty $3.4 billion in shares, answering in part calls from Elliott Management and other investors to bolster its stock price.
Masayoshi Son's globe-spanning tech giant has been under pressure to buy back shares given that its market capitalisation trades at a large discount to the combined value of its assets.
SoftBank said that over the next year it would buy back up to 6.8% of its own shares, worth as much as 500 billion yen.
Elliott has pressured SoftBank for a $15 billion share buyback programme, according to a person familiar with the matter in June. The U.S activist investor rebuilt a stake worth more than $2 billion, the person added.
SoftBank also posted a narrower quarterly net loss of 174.3 billion yen compared with a loss of 477.6 billion in the same period a year earlier. That was based on its reported net income attributable to shareholders.
On a separate measure, net income, it swung to a profit of 10.5 billion yen for the period.
The company, which had $26 billion of cash on hand as of the end of March, has been rebuilding its finances after the failure of high-flying office-sharing startup WeWork and after some of its tech firms it is invested in through its Vision Funds fell out of favour among investors.
The results come amid much market turmoil, particularly for large-cap Japanese stocks and major tech companies which have been hurt by a massive unwinding of yen carry trades and U.S. recession fears. SoftBank's shares slumped almost 20% on Monday but have since recovered.
They finished up 5.2% on Wednesday before the results.
($1 = 147.0100 yen)
(Reporting by Anton Bridge; Editing by David Dolan and Edwina Gibbs)
Copyright (2024) Thomson Reuters. Click for restrictions
This article was written by Anton Bridge from Reuters and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.