SoftBank is buying back as much as $4.8 billion of its stocks after their current dive, a move that partially met the demand of activist fund Elliott; however, it failed to soothe investors fearing from the coronavirus pandemic.
The plan to buy back as much as 7% of its shares for as much as 500 billion yen ($4.8 billion) declared by SoftBank Friday comes as the Japanese investment group’s shares have dipped by a quarter in March alone.
It comes after Elliott Management urged SoftBank earlier this year for $20 billion in stock buybacks by selling down its holdings in Chinese e-commerce titan Alibaba
A SoftBank spokesperson stated the group had decided to execute the buyback of its own accord after considering the risk that current stock market volatility may increase the deep discount that SoftBank’s stock has relative to the value of its holdings.
SoftBank stocks dropped as much 9.6% to a 14-month low Friday amid a crash in global stock exchanges; however, cut losses to close down 5%.
The buyback will start Monday and will happen over a year, the company mentioned in a statement.
SoftBank said in February it plans to borrow as much as 500 billion yen from 16 domestic and overseas financial establishments using a part of its stake in telecommunications agency SoftBank as collateral to boost its liquid cash.
The loan comes as its finances have been contracted by losses at its $100 billion Vision Fund and SoftBank releases its own cash into a successor fund because of lackluster appetite from outside traders.