SoftBank shares climb to a new 20-year high

Bloomberg

SoftBank Group Corp. shares climbed to a new 20-year high as investors rally behind founder Masayoshi Son‘s more cautious strategy of selling assets, paring debt and buying back shares.
The Tokyo-based company’s stock gained more than 3% to 7,244 yen, the highest level since March of 2000 in the midst of the dot-com boom. The stock had already hit several two-decade highs in the second half of this year after a record plunge in March with the coronavirus pandemic.
Long known for his extravagant spending on acquisitions and investments, Son reversed course this year after the Covid-19 outbreak and management missteps. He unveiled plans to sell 4.5 trillion yen ($43 billion) in assets and buy back a record 2.5 trillion yen of his own stock. Shares are up more than 160% from their March low.
“It’s a big turning point for SoftBank,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. “They reversed course to defensive from offensive, shining a spotlight on the value of their assets.”
By the end of June, Son had offloaded $13.7 billion of Alibaba Group Holding Ltd. stock, an even larger chunk of his stake in T-Mobile US Inc. and some shares of SoftBank Corp., the Japanese telecommunications affiliate. He then announced the sale of chip designer Arm Ltd. to Nvidia Corp. for about $40 billion and sold an additional chunk of SoftBank Corp. for more than $10 billion.
In a conference call in August, Son said that the Covid-19 fallout had persuaded him to pull back. SoftBank would cash in some of its holdings to prepare for a prolonged downturn or new opportunities.
“Defense is something that’s always necessary to fight and always a very important element of the fighting,” Son said at the time. “Cash is actually the defense for us.”