$4.8B buyback does little to stop SoftBank’s fall

Activist investor Elliott Management pushed for repurchase of an even greater amount of shares

Mar.March 13, 2020 01:00 PM
Masayoshi Son (Credit: Tomohiro Ohsumi/Getty Images, iStock)

Masayoshi Son (Credit: Tomohiro Ohsumi/Getty Images, iStock)

SoftBank is set to buy back $4.8 billion in shares amid demands from an activist investor and a volatile stock market.

The buyback would represent 7 percent of the Japanese conglomerate’s shares, which have been plummeting. The WeWork parent has come under fire recently for its handling of the beleaguered co-working firm’s botched public offering last year. The $4.8 billion buyback is a fraction of the $20 billion activist investor Elliott Management initially pushed for, the Wall Street Journal reported.

SoftBank Chief Executive Masayoshi Son has said that he is open to more buybacks, “when the finances allow it.”

Despite announcing the buyback plan, the conglomerate’s stocks continued to fall, and were 6.9 percent lower at the end of morning trading. Still, it fared slightly better than Japan’s benchmark Nikkei 225 index, which was down 8 percent.

SoftBank recently put the brakes on its second Vision Fund, under pressure from investors to provide better results from SoftBank’s first $100 billion Vision Fund. WeWork as well as real estate brokerage Compass, which just laid off dozens of workers, received billions in funding from the first Vision Fund.

[WSJ] — Georgia Kromrei

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