Acting at a time when the coronavirus outbreak
has ramped up uncertainty for many industries,
the company said it will spend the remaining
2.5 trillion yen on debt redemptions, bond
buybacks and increasing its cash reserves.
The company said it believes its shares are
undervalued by 73% to their “intrinsic value.”
SoftBank Group Corp.’s share price jumped
18.6% to 3,187 yen ($28.87).
Son said the share purchases amount to less
than one-fifth of the company’s total assets,
while significantly reducing debt. The total 5
trillion yen ($45.5 billion) in shares that will be
repurchased over a year’s time account for 45%
of the company’s total shares and are to be
retired, he said.
SoftBank’s profit dropped to 55 billion yen
($500 million) in the last quarter after it
posted losses of 700 billion yen ($6.4 billion)
in the July-September quarter. The damage
came largely from its Vision Fund, created
to invest in startups like the shared office
space venture WeWork and ride-hailing
company Uber.
The reputation of the Vision Fund, which was
started mostly with Saudi money, suffered
in 2018, after the killing of Saudi journalist
Jamal Khashoggi. The fund has been investing
in various companies, solar projects and
artificial intelligence.
Adding to the company’s challenges has been
SoftBank’s bailout of WeWork last year. That
invited scrutiny after WeWork, which bills itself
as both a technology and real-estate company,
canceled an initial public offering.