Please ensure Javascript is enabled for purposes of website accessibility

SoftBank Agrees to Buy Back $4.8 Billion in Stock Amid Shareholder Pressure

By Donna Fuscaldo - Mar 13, 2020 at 3:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Elliott Management was pushing for an even bigger stock buyback program out of SoftBank.

With SoftBank's (SFTB.Y 3.48%) stock plunging amid COVID-19, and the company facing pressure from activist investment firm Elliott Management, SoftBank announced plans to buy back $4.8 billion in stock. 

The Japanese technology giant said it is repurchasing a maximum of 7% of the shares outstanding. The repurchase program kicks off March 16th and runs through March 15th of 2021.

Stock board with stock buyback sign.


The move was seen as a direct response to Elliott Management, the investment firm that's built a $2.5 billion stake in SoftBank.  The activist investment firm wanted SoftBank to buy back $20 billion in shares. Elliott and other investors have been critical of Softbank's recent technology investments -- its $100 billion Vision Fund has fallen on tough times, losing billions of dollars, after making several bets that failed to pan out. 

The Vision Fund has stakes in Uber (UBER 2.95%) and Slack (WORK), both of which have struggled since becoming publicly traded companies. SoftBank also realized a $4.6 billion loss from its investment in WeWork after it failed to go public.

SoftBank's Chief Executive Masayoshi Son recently warned there may be more bad investments to come as he continues the fund's stated strategy to find the technology industry's next leaders.That is proving more difficult in the wake of the COVID-19 outbreak. Some of SoftBank's investments including those in ride-hailing, food delivery, and hospitality are being hit hard because of the outbreak. That has weighed on SoftBank's stock as well as the broader market. 

Despite SoftBank's commitment to finding tomorrow's tech leaders, investors seem to prefer it uses its cash to buy back shares. Elliott, for its part, wants more transparency and better governance of the Vision Fund in addition to stock repurchases. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

SoftBank Group Corp. Stock Quote
SoftBank Group Corp.
$19.62 (3.48%) $0.66
Slack Technologies, Inc. Stock Quote
Slack Technologies, Inc.
Uber Technologies, Inc. Stock Quote
Uber Technologies, Inc.
$23.03 (2.95%) $0.66

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.