Elliott Management has reestablished a significant stake in SoftBank, urging for a $15 billion share buyback to boost the share price and show support for Masayoshi Son’s growth plan. The U.S. activist fund’s involvement has sparked engagement with SoftBank’s management, leading to a surge in share prices. This move follows Elliott’s previous attempt in 2020 for a $20 billion buyback and governance changes.
Elliott Management has reestablished a significant stake in the Japanese tech conglomerate SoftBank, founded by Masayoshi Son, and is advocating for a $15 billion share buyback. The U.S.-based activist fund’s position, now valued at over $2 billion, has prompted direct engagement with SoftBank’s senior management over recent months.
SoftBank currently has a strong balance sheet and substantial cash reserves following a self-declared period of “defense mode.” Son’s growth strategy is heavily reliant on a roughly 90% stake in the UK chip designer Arm, which has surged in stock market value, contributing to SoftBank’s record net asset value of $180 billion.
Despite a greater than 50% share price increase this year, SoftBank’s market capitalization remains at about $90 billion. News of Elliott’s investment pushed SoftBank shares up by as much as 5.5% in late trading in Tokyo on Wednesday.
Elliott believes a $15 billion buyback would immediately boost the share price and demonstrate confidence in Son’s strategy. This marks Elliott’s second attempt at influencing SoftBank. In 2020, Elliott held a $2.5 billion stake in SoftBank, advocating for a $20 billion buyback and governance changes.
Currently, SoftBank’s investment focus has shifted towards Arm and returning cash from its Vision Funds, with a decreased loan-to-value ratio of 8.4%, compared to over 20% at the close of 2021. This stake is spearheaded by Nabeel Bhanji, Elliott’s London-based senior portfolio manager, who has been involved in previous investments in Tokyo, including Toshiba.
Both Elliott and SoftBank declined to comment on the developments.
