Masayoshi Son goes on a Softbank buyback spree

Masayoshi Son, founder of SoftBank, plans to have his company buy back billions of pounds' worth of its own shares over the next year.

Masayoshi Son, founder, SoftBank

Coronavirus “has become a global pandemic, stockmarkets are crashing, credit is getting crunched and [SoftBank’s] share price is down 30%,” says Tim Culpan on Bloomberg. “So of course … Masayoshi Son would announce a share buyback.”

The Japanese billionaire plans to have SoftBank – his sprawling technology conglomerate – buy back up to ¥500bn (£3.9bn) of its shares over the next year.

The timing may seem odd, but Son has been under pressure from shareholders, including US activist Elliott Management, after some recent deals started to look unwise. Son made his name with a $20m stake in a small Chinese e-commerce firm called Alibaba in 2000. When Alibaba listed in 2014, that stake was worth $60bn.

Ever since, investors have viewed him as a tech visionary. But recent investments – including office-rental firm WeWork and ride-hailing service Uber – have left them wondering if hubris is affecting his judgement.

Hence this “face-saving gesture” of a buyback that “marginally addresses shareholders’ demands”, says Christopher Chu in FinanceAsia (it’s still only a quarter of what Elliott wanted). “It is an act of goodwill rather than an inflection point for the company’s investment priorities.”

But Son gets to pretend he’s listening, says Culpan – and while shares could drop further, he will just “wait for the inevitable rebound that will make him seem like a genius”. Don’t be surprised if other tech firms awash with cash – such as Apple – follow his lead and ramp up their own buybacks. 

Recommended

Key dates for 2023: here are the dates you need to know when it comes to your money in 2023
Personal finance

Key dates for 2023: here are the dates you need to know when it comes to your money in 2023

There is no shortage of important dates to be aware of next year – which are likely to affect your financial health. We run through the key dates in 2…
6 Dec 2022
What is a recession and how will it affect you?
UK Economy

What is a recession and how will it affect you?

The UK economy is heading towards a recession, according to economists. But what is a recession, and what does it mean for your money?
6 Dec 2022
Investment scams are infiltrating Facebook and Instagram
Investment strategy

Investment scams are infiltrating Facebook and Instagram

Research from Which? found hundreds of investment ads on Facebook and Instagram that could be misleading investors into potential investment scams.
6 Dec 2022
Is it a good time to buy an annuity as rates hit a 14-year high?
Pensions

Is it a good time to buy an annuity as rates hit a 14-year high?

Average annual annuity income has risen by nearly £1,000 since the start of the year. We look at whether now is a good time to buy an annuity.
6 Dec 2022

Most Popular

Is it cheaper to leave the heating on low all day?
Personal finance

Is it cheaper to leave the heating on low all day?

The weather is getting colder and energy bills are rising, but is it really cheaper to leave the heating on low all day or should you only turn it on …
1 Dec 2022
Radiator vs electric heater – which is cheaper?
Personal finance

Radiator vs electric heater – which is cheaper?

We compare the costs, pros and cons of radiators and electric heaters and see which one will help keep your energy bill as low as possible.
28 Nov 2022
State pension errors – why tens of thousands of mothers could be missing out on millions in state pension payments
State pensions

State pension errors – why tens of thousands of mothers could be missing out on millions in state pension payments

LCP launches Mothers Missing Millions campaign amid DWP state pension errors.
3 Dec 2022