By Dhirendra Tripathi
Investing.com – Softbank (OTC:SFTBY) Group stock (T:9984) closed 10.5% higher in Tokyo Tuesday as the Japanese conglomerate said it will buy back up to one trillion yen (around $8.8 billion) of its own shares.
The 25 million shares earmarked for repurchase account for 14.6% of SoftBank’s total shares outstanding, excluding treasury stock.
The Group attributed the move to the stock's depressed valuation. It trades at a deep discount to net asset value (calculated as the value of shares held minus adjusted net interest-bearing debt).
“With a discount this wide, I thought, what would make shareholders happy? A buyback,” Bloomberg quoted founder Masayoshi Son as saying at an investor presentation Monday. “We had a heated discussion at the board meeting. We decided now is the time to buy back shares.”
SoftBank Monday reported a September-quarter loss of 397.9-billion yen, chiefly dragged down by loss of 825.1 billion at its flagship Vision Fund. The losses were caused largely by the Fund's Chinese stocks, which suffered from Beijing's regulatory clampdown earlier in the summer.
SoftBank concluded a 2.5-trillion-yen buyback program last year that helped its valuation more than triple from its pandemic low. But the company’s shares had slid more than 40% from their peak in mid-March after the repurchase program expired.