The Japanese SoftBank Group is buying a treasury stock worth 2 trillion yen ($18 billion). This means that it’s repurchasing its own shares to reduce the amount of outstanding stock on the open market. This is the largest purchase of treasury shares that SoftBank has announced so far.
SoftBank will sell or liquidate holdings up to 4.5 trillion Japanese yen ($41 billion). This is a move to buy back up to 2 trillion Japanese yen ($18 billion) in stock. According to CNN Business, this is its second big buyback in a month.
SoftBank’s stock price was cut in half in a month due to concerns about the coronavirus. SoftBank Group’s share price has fallen rapidly since mid-February. On March 19, its price dropped more than half in just a month. This is because concerns over the profitability of Uber and WeWork, companies which SoftBank has invested heavily on, will deteriorate due to the global economic downturn caused by the coronavirus outbreak.
SoftBank is planning to secure cash by listing WeWork, a company that has suffered from financial difficulties. Value of WeWork fell to a third as skepticism about business model and corporate governance spread among investors ahead of the IPO. WeWork IPO has been withdrawn as SoftBank saw its net profit drop 99.4% YoY in the third quarter of 2019.
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