Masayoshi Son goes on a Softbank buyback spree

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.