SoftBank Stock Surges Up to 6.3% Following Report of Elliott Management’s Advocacy for $15 Billion in Buybacks

On Wednesday, shares of SoftBank Group surged by as much as 6.3% in response to a report indicating that Elliott Management had amassed a significant stake in the Japanese technology conglomerate and was advocating for stock repurchases.

According to a report from the Financial Times, Elliott is advocating for $15 billion in share buybacks, asserting that these repurchases will elevate SoftBank’s stock price and serve as a testament to Son’s confidence in his strategy. On Wednesday, SoftBank shares reached a peak of 9,572 yen, marking a 6.32% increase from the previous day’s closing price, as per data from LSEG. However, by the end of Wednesday’s trading session, the shares settled at 9,420 yen, reflecting a 4.6% increase.

According to individuals familiar with the matter, Elliott’s stake was valued at over $2 billion, and the U.S. fund manager has been engaging with SoftBank’s senior management over the past two to three months. SoftBank, led by Masayoshi Son, has pivoted towards investments in the artificial intelligence sector. This strategic shift came after the company declared last year that it was transitioning from a “defense mode,” during which it amassed a significant cash reserve of over $35 billion, to an “offense mode.”

SoftBank is placing a significant bet on U.K. chip designer Arm, which underwent its initial public offering (IPO) last year. Arm is purportedly preparing to introduce AI chips by 2025 in order to capitalize on burgeoning demand. Additionally, the report indicated that Elliott is revisiting its focus on SoftBank for a second time, with particular attention to the substantial disparity between the total value of the company’s assets and its current market valuation.

In 2020, Elliott invested $2.5 billion in SoftBank and advocated for share buybacks totaling $20 billion, as well as governance changes, according to a report by the Financial Times. Elliott Management did not provide an immediate response to CNBC’s request for comment. SoftBank Group opted not to comment on the matter.