Precise Investors

Sunday, January 29, 2023
Stocks & Shares

SoftBank shares tumble 8% as buyback programme not extended


SoftBank completed a $22.8 billion buyback on Wednesday, though Chief Executive Son said further repurchases remain an option

SoftBank Group Corp shares tumbled 8% in morning trade on Thursday after the conglomerate did not extend its buyback programme, removing support for the stock as concern over frothy portfolio valuations outweighed record earnings.

SoftBank completed a 2.5 trillion yen ($22.8 billion) buyback on Wednesday, though Chief Executive Masayoshi Son said further repurchases remain an option.

If we think it’s beneficial to buy back shares we will, Son told reporters, adding that investment opportunities and any significant underperformance of the group’s shares would be taken into account.

SoftBank reported record profit following the listing of e-commerce firm Coupang Inc, but shares of many investments have since been caught in a tech sell-off while top asset Alibaba Group Holding Ltd has been hit by a regulatory crackdown.

Without the buyback, SoftBank’s stock price is likely to reflect the performance of its listed investments, Jefferies analyst Atul Goyal wrote in a client note. He said he was extremely surprised SoftBank did not extend the programme.

The slide in SoftBank shares extends this week’s decline to 17%, with market observers continuing to express concern that valuations are too high amid rock bottom interest rates.

Coupang is expensive compared to peers and despite the intense sell-off there is no valuation driven bottom in sight, LightStream Research analyst Mio Kato wrote on the Smartkarma platform.

Doordash Inc and Uber Technologies are also unsustainably valued, Kato added, citing their money losing business models and Uber’s worsening debt position.

SoftBank executives point to a robust pipeline of startups preparing to list.

Vision Fund 2, which is cutting smaller cheques than the first fund, has completed or approved investments in almost 100 startups.


The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply