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SoftBank Surges 6.3% Amid Elliott's $15B Buyback Push

SoftBank Group experienced a remarkable surge in its shares, skyrocketing by up to 6.3%
June 6, 2024

SoftBank Group's shares climbed as much as 6.3% on Wednesday following reports that Elliott Management has significantly increased its stake in the Japanese tech conglomerate and is advocating for substantial stock repurchases.

According to the Financial Times, Elliott Management is pressing for $15 billion in share buybacks. The hedge fund believes this move would boost SoftBank’s share price and demonstrate founder Masayoshi Son's confidence in the company’s strategy.

On Wednesday, SoftBank’s shares reached a peak of 9,572 yen, marking a 6.32% increase from the previous day’s closing price, based on LSEG data. The shares ended the day at 9,420 yen, up 4.6%.

Elliott’s investment in SoftBank now exceeds $2 billion, and the U.S. fund manager has been in discussions with SoftBank’s senior management over the past few months, sources familiar with the matter revealed.

Under the leadership of Masayoshi Son, SoftBank has shifted its focus towards artificial intelligence, amassing over $35 billion during its “defense mode” before pivoting to an “offense mode” last year. A significant part of this strategy includes a major bet on U.K. chip designer Arm, which went public last year and is planning to launch AI chips by 2025 to meet growing demand.

This is Elliott Management's second major engagement with SoftBank. In 2020, the hedge fund invested $2.5 billion and pushed for $20 billion in share buybacks along with governance reforms, according to the Financial Times.

Elliott's renewed push highlights the ongoing disparity between the value of SoftBank's assets and its market valuation. Both Elliott Management and SoftBank declined to comment on the latest developments.

As SoftBank navigates these strategic shifts and shareholder pressures, the coming months will be crucial in determining whether the proposed buybacks will materialize and how they will impact the company's market position.

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