Elliott Management has rebuilt a stake worth over $2 billion in SoftBank Group, calling for a $15 billion share buyback. This move by the activist investor aims to boost SoftBank's share price and demonstrate CEO Masayoshi Son's confidence in his strategy. Shares in SoftBank rose by more than 5% following the news, eventually closing up 4.6% at 9,420 yen, the highest in three years. Elliott's engagement with SoftBank's senior management over the past few months underscores its belief in the potential impact of a buyback.
SoftBank's financial position has significantly improved since 2022, partly due to the successful market debut of Arm Holdings (ARM), in which SoftBank holds a 90% stake. Arm's share price has more than doubled since its IPO, driven by the rapid adoption of artificial intelligence, enhancing the value of SoftBank's assets. Elliott's renewed investment and call for a buyback reflect a strategic push to capitalize on SoftBank's strengthened position and the current undervaluation of its assets.
Market Overview:- Elliott Management rebuilds a $2 billion stake in SoftBank Group.
- Elliott calls for a $15 billion share buyback to boost SoftBank's share price.
- SoftBank's shares rose 4.6% following the news, reaching their highest in three years.
- SoftBank's financial position improved with Arm Holdings' successful IPO.
- Elliott has been engaging with SoftBank's senior management for the past few months.
- Elliott previously pushed for a $20 billion buyback in 2020 but sold off its stake in 2022.
- The proposed buyback could significantly enhance SoftBank's market valuation.
- Elliott's activities in Japan signal a broader strategy to influence corporate governance.
- The rise in AI technology could continue to boost the value of SoftBank's assets, particularly Arm Holdings.
Elliott's activity in Japan this year includes building stakes in Mitsui Fudosan and Sumitomo Corp, and previously calling for changes at Dai Nippon Printing and Toshiba. This strategic push demonstrates Elliott's commitment to influencing corporate governance and value creation in key Japanese companies. As SoftBank continues to navigate its portfolio investments, Elliott's involvement is expected to bring increased attention to the company’s strategic decisions and financial health.
The Financial Times first reported Elliott’s renewed stake and call for a buyback, highlighting the impact of activist investors on corporate strategy. As SoftBank addresses its current valuation discount, the engagement from Elliott may accelerate reforms and strategic initiatives aimed at enhancing shareholder value. The evolving dynamics between SoftBank and Elliott will be closely watched by investors, particularly in light of the broader market implications for AI and technology investments.
