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The deal marks Masayoshi Son-led SoftBank’s first investment in India since December, when it invested in Lenskart. (Photo: Bloomberg)
The deal marks Masayoshi Son-led SoftBank’s first investment in India since December, when it invested in Lenskart. (Photo: Bloomberg)

SoftBank climbs to 20-year high after buybacks propel shares

SoftBank rose for the 8th day in a row to finish at ¥6,955, the highest since March of 2000. The stock had breached ¥6,900 in August before revelations that Son had begun trading options on tech stocks, a potentially risky endeavor that spooked some investors

SoftBank Group Corp. shares climbed to their highest in two decades, a sign founder Masayoshi Son is recovering from a rocky year marked by setbacks from the coronavirus and losses at startups such as WeWork.

SoftBank rose for the eighth day in a row to finish at ¥6,955, the highest since March of 2000. The stock had breached ¥6,900 in August before revelations that Son had begun trading options on tech stocks, a potentially risky endeavor that spooked some investors.

After a record fall in its share price in March, SoftBank unveiled plans to offload ¥4.5 trillion ($42.6 billion) in assets and buy back an unprecedented ¥2.5 trillion of its own stock. Son has since agreed to sell far more than that of his holdings, suggesting he could use the money for a big deal or his long-debated plans to take SoftBank private.

“The stock took off for the races after speculation over a privatization," said Justin Tang, head of Asian research at United First Partners in Singapore. “That along with the ongoing buybacks and the sale of Arm to Nvidia is what is putting gas in SoftBank."

As of June, Son had offloaded $13.7 billion of Alibaba Group Holding Ltd. stock, an even larger chunk of his stake in T-Mobile US Inc. and some shares of SoftBank Corp., the Japanese telecommunications affiliate. He then announced the sale of chip designer Arm Ltd. to Nvidia Corp. for about $40 billion and sold an additional chunk of SoftBank Corp. for more than $10 billion.

The prospects for SoftBank’s startups have also improved, with the reduction of Covid-19 in many countries and strong demand for initial public offerings. Son had backed many so-called sharing economy companies, including ride-hailing services Uber Technologies Inc. and China’s Didi Chuxing.

“The other obvious reason would be the decline in coronavirus cases in Japan. Clearly whatever fear that might be in the market is not as palpable as it was in March," Tang said.

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