SoftBank Group Corp. shares touched their highest level in two decades as a series of buybacks help the stock recoup losses suffered during the coronavirus market rout.
The stock rose as much as 3.8% to 6,145 yen ($57), the highest since March 2000 on intraday basis. That’s more than double the level in mid-March, which was the lowest in more than three years. The benchmark Topix index was little changed.
The recovery is something of a vindication for SoftBank’s founder Masayoshi Son, who unveiled plans to sell 4.5 trillion yen of assets to reduce debt and bankroll record share buybacks. Son has frequently complained that SoftBank’s shares, even at their peak, trade at less than the value of its portfolio of investments. Even after the recent gains, the stock still trades at a discount of about 50%, according to company’s own calculations.
“SoftBank’s business model has evolved over the past 20 years to match the times, from software to wireless service and now to an investment fund,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. “The way the coronavirus is reshaping our society, the winners will be communications infrastructure, networks and AI — all businesses that SoftBank invests in.”
SoftBank has also had a series of wins over the same period, including merging its Sprint Corp. with T-Mobile US Inc., and seeing some investment bets pay off. Online home-insurance providerLemonade Inc.surged as much as 86% in its U.S. IPO. Thursday.
SoftBank’s Vision Fund, with almost 90 companies in its portfolio, lost almost $18 billion in the fiscal year ended March 31, as it wrote down the value of investments in WeWork and Uber Technologies Inc., among others. Son himself has said he expects about 15 of the fund’s startups to go bankrupt while predicting another 15 will thrive.
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