US, WASHINGTON (ORDO NEWS) — The investments of the Japanese major investor Softbank have not worked out recently. The company is under great financial pressure, which is exacerbated by the corona pandemic. As a result, the investor is parting with billions in shares – and is giving shareholders a shopping spree.
The Japanese technology investor Softbank will slim down significantly. To finance an almost 17 billion euro share buyback, company holdings worth up to 38 billion euros would be sold or sold, the company announced. In addition, the world-famous Softbank boss Masayoshi Son wants to reduce debts and replenish cash reserves. This reflects Son’s “unshakable confidence” in business, it said.
The news caused a buying frenzy among shareholders. The share shoots up 19 percent. That was the biggest daily gain in almost twelve years. Softbank itself and its $ 100 billion Vision Fund hold shares in the ridesharing company Uber, coworking provider WeWork and chip company ARM Holdings as well as many startups around the world such as the Berlin used car dealer Auto1.
Recently, however, some of the major investor’s bets did not work out, which is why the company is under financial pressure, which is now exacerbated by the coronavirus pandemic. In addition, there is the activist hedge fund Elliott, which demands higher profits for softbank shareholders.
Is Softbank parting ways with T-Mobile US?
Under this impression, the Japanese company plans to sell billions of dollars in the next four quarters. So far it is unclear what Softbank wants to separate from. A three billion dollar financial injection is already on the brink for the ailing office broker WeWork. The disagreements have already led to public blame.
According to analyst Kirk Boodry from market watcher Redex Holdings, Softbank could also divest its stake in Deutsche Telekom subsidiary T-Mobile US, which belongs to the Japanese after the merger with US competitor Sprint.
The € 17 billion share buyback is in addition to the purchase of shares worth around € 4 billion, which had been announced earlier this month. Ultimately, around 45 percent fewer softbank papers will be on the market.
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