SoftBank Is Selling Up To $41 Billion To Buy Back Stock And Reduce Debt

By Dan Anderson ● March 24, 2020
  • SoftBank Group announced it is planning to sell up to $41 billion in assets in order to buy back stock, reduce debt, and increase its cash positions

SoftBank Group announced it is planning to sell up to $41 billion in assets in order to buy back stock, reduce debt, and increase its cash position. With the funds, SoftBank is going to buy back $18 billion of its stock. And the rest of the funds will be used for cash reserves, debt reduction, and bond buybacks.

This program will be the largest share buyback and will result in the largest increase in cash balance in the history of SBG, reflecting the firm and unwavering confidence we have in our business,” wrote SoftBank chairman Masayoshi Son in a statement. “This will allow us to strengthen our balance sheet while significantly reducing debt.”

The assets being sold are less than 20% of SoftBank’s current asset value. SoftBank pointed out that its shares are “substantially undervalued” and noted that the buyback would see 45% of the company’s stock repurchased. This transaction will strengthen its balance sheet and enhance the credit rating.

SoftBank’s stock plummeted in recent weeks due to concerns about the liquidity of the company. Some of SoftBank’s recent fumbles have been investing in tech company’s at inflated valuations through its $100 billion Vision Fund.

But SoftBank also has holdings in high-value companies like Alibaba (a 26% stake worth more than $120 billion), Arm Holdings, and Japanese mobile carrier SoftBank Corp. SoftBank acquired Arm for $32 billion in 2016. SoftBank is also in the process of merging its U.S. telecommunications subsidiary Sprint in an all-stock deal with T-Mobile.