The founder of SoftBank, Masayoshi Son, launched a 1 trillion yen ($ 8.8 billion) share buyback program over the next 12 months on Monday, bowing to investor pressure after the unit Vision Fund will reveal a record quarterly loss of 825.1 billion yen.
The Tokyo-based company detailed that the idea, then, is to buy back up to 14.6% of its outstanding shares and, if the measure is not completed in the next year, it could be extended.
“We had a heated discussion at the board meeting. We decided that now is the time to buy back shares,” the businessman said in an investor presentation after the disclosure of financial results. “I am very excited, because I am a shareholder.”
The firm’s largest shareholders, including activist hedge fund Elliot Management, had been pushing for measures like these amid the weak performance of the Japanese tech giant’s share prices.
For example, Vision Fund – the $ 100 billion investment vehicle backed by SoftBank– has suffered on the stock market in China from strong government regulations, while other big bets, such as South Korean e-commerce group Coupang, have failed.
Also, your most valuable participation is Alibaba Group Holding, one of the main targets of pressure from Beijing. It also has a stake in Didi Global, the rideshare giant that has also come under regulatory attack.
Despite the setback, Son said he would accelerate the pace of investments for the fund, which had allocated 15% of its $ 33 billion capital to China at the end of September.
For the July to September quarter, SoftBank reported a net loss of 397.9 billion yen compared to a profit of 627.5 billion yen for the same period last year, as profits from its domestic telecommunications business helped reduce the unit’s losses Vision Fund.
In just 12 months, the value of the group’s net assets plummeted from 27.9 trillion yen to 20.9 trillion yen, mainly due to regulatory crackdown by the Chinese e-commerce group. Alibaba.
“We are facing a huge storm once again,” Son told a news conference.
SoftBank reported a record loss on your unit Vision Fund for the second fiscal quarter due to a decline in the value of public holdings, including Didi and Korean e-commerce giant Coupang. The investment arm lost 825.1 billion yen.