Elliott Management, an activist American investor, has repurchased a significant stake in SoftBank, and now wants the Japanese technology fund, SoftBank, to deliver returns for shareholders worth billions of dollars.
The US hedge fund founded by billionaire Paul Singer in 1977, with assets of $66 billion, is asking SoftBank to launch an $15 billion share-buyback programme, two years after it sold its stake.
Elliott acquired a $3 billion stake SoftBank in 2020 and called for a buyback of $20 billion and better corporate governance.
SoftBank was implementing a buyback program at the time. Elliott sold the rest of its stake after 2022, when the fund’s investment portfolio was affected by the collapse of the technology company valuations.
Elliott has been in contact with senior executives at SoftBank, who see the buybacks of SoftBank shares as a way to boost the share price and support the strategy of the company’s chief executive Masayoshi Son.
Son, age 66, founded SoftBank more than 40 years ago. SoftBank is well-known for its billion-dollar investments in technology companies. Son made his fortune by investing $20 million in Alibaba, China’s ecommerce company, when it was a startup. The investment in Alibaba led to a series of others.
SoftBank has also had notable failures, including investments in WeWork (the office space provider) and FTX (the collapsed cryptocurrency exchange).
SoftBank has seen its financial situation improve after a string of bad results. This is due to the successful listing on the New York Stock Exchange of Arm Holdings (the British chip designer).
SoftBank acquired Cambridge-based Arm in July 2016 for £24.3 billion. Arm was listed on London’s FTSE 100 Index. SoftBank chose to list Arm on Nasdaq last September after an unsuccessful attempt in February 2022 to sell Arm to Nvidia.
SoftBank holds a 90% stake in Arm. The company is forecasting revenues between $875 and $925 millions for the current quarter.
SoftBank is in a much better financial position than two years ago. Arm’s share price has more than doubled as a result of the rapid adoption by AI. SoftBank’s assets have now reached a new record value of Y=27.8 billion ($178 billion). SoftBank’s stock is now trading at a significant discount to its assets.
Elliott, who once seized a naval vessel from Argentina in Ghana, to put pressure on the Ghanaian government to pay bondholders, had previously launched campaigns against a number of UK companies, including GSK Whitbread and BHP.
Elliott and SoftBank declined comment
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