Japan’s SoftBank Group is anticipated to report a modest profit for the first quarter on Wednesday, but investor focus will be on whether the company will announce a major share buyback.
This comes as SoftBank’s shares, which fell nearly 20% on Monday, have partially recovered amid ongoing market volatility affecting large-cap Japanese and tech stocks.
SoftBank CEO Masayoshi Son faces growing pressure from investors, including activist Elliott Management, to repurchase shares due to the significant discount at which the company’s market cap trades compared to its asset value.
Analysts estimate this discount to be around 60%, up from 53% in March and 36% a year ago. With $26 billion in cash as of March and a recent profit forecast of 109 billion yen ($748 million), the company is in a strong position to consider a substantial buyback.
SoftBank has been rebuilding its financial position after setbacks with WeWork and its tech investments. The upcoming earnings report and any announcement of a buyback program will be closely watched by investors.
(Reuters)