Elliott Management rekindles pressure on SoftBank for a $15 billion share buyback, despite the company’s improved financial performance led by investments in AI and chip-related technologies. The rising market value of US-listed chip designer Arm adds to SoftBank’s robust net asset value, potentially complicating Elliott’s demands.
SoftBank Faces Renewed Pressure from Elliott Management
SoftBank’s founder, Masayoshi Son, may find reprieve with the rising market value of the US-listed chip designer, Arm. SoftBank’s focus has pivoted towards investments in AI and chip-related technologies, positively affecting earnings.
Elliott Management has rekindled its stake in SoftBank, urging the company to initiate a $15 billion share buyback. This marks the second time Elliott has targeted SoftBank, previously pushing for a $20 billion buyback in 2020.
The company’s financial strategy has significantly improved since its earlier struggles with declining investment valuations, particularly in Uber and Slack. This year, SoftBank’s shares have surged by 56%, trading well above historical levels. The net asset value reached a record high of ¥27.8 trillion at the end of March, bolstered by Arm’s market value.
Currently, Arm constitutes about half of SoftBank’s asset holdings, contrasting with Alibaba’s significant share four years ago. This shift may challenge Elliott’s campaign for share buybacks, as SoftBank’s more focused investment strategy appears more sustainable.
Elliott Management’s talks with SoftBank’s senior management continue, but the Japanese tech group’s strong financial performance and narrowed investment focus might make the activist’s demands harder to achieve.
