SoftBank Shares Jump Following Buyback Announcement
Yesterday, Japanese multinational SoftBank Group's quarterly results revealed a net loss of $3.51 billion, significantly larger than the $2.64 billion loss which had been forecast by analysts.
These negative results were largely driven by losses on its Chinese investments, particularly its largest asset, e-commerce giant Alibaba, whose value fell by around a third during the quarter.
Despite the losses, SoftBank Group stated that their shares were undervalued and announced plans to buy back almost 15% of their shares. A move that will see them spend close to $9 billion over the next year.
In response to news of the buyback, share price jumped almost 10% when the Tokyo market opened on Tuesday morning.
In April 2020, the Japanese conglomerate announced a $23 billion share buyback plan, which acted as a catalyst for share price to increase more than 126% over the following 12 months. However, since the record buyback ended earlier this year, the share price had fallen by around 38% before today’s session.
Investors will be hoping that this latest buyback announcement and subsequent jump in share price is the beginning of a new upward trend.
Five year evolution of price:
- 2020 = +70.01%
- 2019 = +30.17%
- 2018 = -18.09%
- 2017 = +14.86%
- 2016 = +26.48%
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