TOKYO/HONG KONG (Reuters) – SoftBank Group Corp (9984.T) stock jumped 20% on Tuesday, extending a run that began a day earlier when the Japanese tech investor announced up to $41 billion in asset sales and a record share buyback to shore up its collapsing share price.

SoftBank shares ended Monday up 19%, hitting their daily limit, after the conglomerate said in the early afternoon it would buy back up to 2 trillion yen ($18 billion) worth of shares in addition to an up to 500 billion yen purchase announced earlier this month.

Chief Executive Masayoshi Son’s foray into investing in late-stage startups via SoftBank’s $100 billion Vision Fund has hammered the firm’s shares as major bets soured, forcing a sell-down of core parts of its portfolio and buybacks – moves long sought by investors pushing for enhanced shareholder returns.

“We would have ideally preferred such an announcement from a position of strength and not because the (SoftBank) stock came under tremendous pressure,” Jefferies analyst Atul Goyal wrote in a note, upgrading his SoftBank stock rating to “buy”.

Selling down SoftBank’s stake in domestic wireless carrier SoftBank Corp (9434.T) to 50% could raise around $10 billion while retaining control of the company, Goyal wrote.

SoftBank also owns 25% of Chinese e-commerce major Alibaba Group Holding Ltd (BABA.N) (9988.HK) – a stake currently worth around $120 billion.

Alibaba’s New York-listed shares have declined 17% year-to date.

A partial sale of SoftBank’s stake is likely, a person familiar with the matter told Reuters, with shares likely to be sold into the open market rather than back to the company.

Alibaba buying back shares from SoftBank will not please its shareholders, “you are only making Masa Son happy. SoftBank wants to sell urgently but Alibaba is not in such a rush,” the person said, who was not authorized to speak with media on the matter and so declined to be identified.

Alibaba declined to comment. SoftBank did not immediately respond to a request for comment.

Reporting by Sam Nussey in Tokyo and Kane Wu in Hong Kong; Additional reporting by Josh Horwitz; Editing by Christopher Cushing

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Franklin Resources buying Legg Mason for $4.5 billion

SAN MATEO, Calif. — Franklin Resources is buyingrival investment managerLegg Mason for $4.5 billion, the latest shakeup in an industry grappling with customers who continue to clamor for lower fees. Franklin Resources Inc., which operates as Franklin Templeton, said Tuesday…

Tyson Foods will reduce prices on some beef products

Atlanta (CNN Business)Tyson Foods will be discounting prices on certain products for the remainder of this week. The price reductions will vary, but Tyson (TSN) told CNN some beef items sold to grocery stores, restaurants and other customers could be…

Russian government develops measures to support the aviation industry

MOSCOW, April 25. /TASS/. The Russian government is developing measures to support the air transportation sector, including airline subsidies, Russian Minister of Economic Development Maxim Reshetnikov said in an interview with Rossiya 24 TV channel. “Indeed, it will also include…

NW China’s Xinjiang sees booming patent licensing in H1

URUMQI — Northwest China’s Xinjiang Uygur autonomous region reported surging patent licensing in the first half of 2020 as enhanced intellectual property rights (IPR) protection continues to boost innovation. A total of 6,011 patent licenses were issued in H1, spiking…