SoftBank Group shares reach highest level since 2000 on recovery hopes

SoftBank Group shares touched their highest level in two decades as a series of buybacks helped the stock recoup losses suffered during the coronavirus market rout.

The stock rose 4.6 per cent to 6,190 yen ($58) on Tuesday, the highest since March 2000. That’s more than double the level in mid-March, which marked the virus-impacted low point for the company, whose market value has since surged by roughly $68 billion. The benchmark Topix index was little changed on the day.

SoftBank’s recovery is something of a vindication for founder Masayoshi Son, who unveiled plans to sell 4.5 trillion yen of assets to reduce debt and bankroll record share buybacks. Son has frequently complained that SoftBank’s shares, even at their peak, have traded at less than the value of its portfolio of investments. Even after the recent gains, the stock still trades at a discount of about 50 per cent, according to company’s own calculations. “It’s safe to assume part of today’s strong move was a result of buyback activity,” said Justin Tang, head of Asian research at United First Partners in Singapore. “A more positive global sentiment around tech also helped.”

SoftBank has also had a series of wins over the same period, including merging its Sprint Corp. with T-Mobile US and seeing some bets pay off. Online home-insurance provider Lemonade surged as much as 86 per cent in its US initial public offering Thursday.

SoftBank’s Vision Fund, with close to 90 companies in its portfolio, lost almost $18 billion in the fiscal year ended March 31, as it wrote down the value of investments in WeWork and Uber Technologies, among others. Son himself has said he expects about 15 of the fund’s start-ups to go bankrupt while predicting another 15 will thrive. “SoftBank’s business model has evolved over the past 20 years, from software to wireless service and now to an investment fund,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management. “The way the coronavirus is reshaping our society, the winners will be communications infrastructure, networks and AI — businesses that SoftBank invests in.”