SoftBank Shares Jump Following Buyback Announcement

November 09, 2021 07:00

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.

Depicted: Admirals MetaTrader 5 – SoftBank Group Corp Daily Chart. Date Range: 2 April 2021 – 9 November 2021. Date Captured: 9 November 2021. Past performance is not a reliable indicator of future results.

 

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.

Depicted: Admirals MetaTrader 5 – SoftBank Group Corp Daily Chart. Date Range: 4 June 2019 - 9 November 2021. Date Captured: 9 November 2021. Past performance is not a reliable indicator of future results.

 

Five year evolution of price:

  • 2020 = +70.01%
  • 2019 = +30.17%
  • 2018 = -18.09%
  • 2017 = +14.86%
  • 2016 = +26.48%

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Roberto Rivero
Roberto Rivero Financial Writer, Admirals, London

Roberto spent 11 years designing trading and decision-making systems for traders and fund managers and a further 13 years at S&P, working with professional investors. He has a BSc in Economics and an MBA and has been an active investor since the mid-1990s