|Bid||1,445.50 x 0|
|Ask||1,445.50 x 0|
|Day's range||1,437.50 - 1,447.50|
|52-week range||1,158.00 - 1,504.50|
|Beta (5Y monthly)||0.21|
|PE ratio (TTM)||14.76|
|Earnings date||11 May 2021|
|Forward dividend & yield||86.00 (6.02%)|
|Ex-dividend date||30 Mar 2021|
|1y target est||N/A|
(Bloomberg) -- Masayoshi Son has run almost all the way through $23 billion allocated to buy back SoftBank Group Corp. shares, raising concerns that his stock’s bull run will end without rapid intervention.The Tokyo-based company purchased more than $20 billion worth of its own shares over the past year through March, according to SoftBank filings, an unprecedented effort that more than doubled the value of the stock. Now, with only about 10% of the committed capital left, the program may run out as soon as next month, Bloomberg’s calculations show.Already, there are signs the buybacks are losing their power to lift SoftBank’s stock. Shares declined 5.7% in March, their worst monthly performance since the pandemic low a year earlier. They fell even as more money was spent on re-purchases, the overall markets advanced, and SoftBank’s profit for the March quarter is expected to hit a record.“Buybacks are coming to an end,” said Atul Goyal, senior analyst at Jefferies. “When that upward pressure on the stock price ends, the short bets may come out.”Son hasn’t said whether he will allocate more capital for buybacks, after announcing four overlapping installments last year for a total of 2.5 trillion yen or roughly $23 billion. It’s possible he would make a new commitment when SoftBank reports earnings results on May 12.A SoftBank spokesperson said in an email the stock price reflects not just buybacks but also shareholder appreciation of the progress being made in the investment business, declining to comment on plans for further buybacks.SoftBank shares slipped 1.5%, while Japanese stock indexes rose.After shares plunged in March 2020 with the coronavirus outbreak, Son unveiled plans to sell off assets to reduce debt and fund buybacks. He also announced a deal to sell chip designer Arm Ltd. to Nvidia Corp. for $40 billion. SoftBank’s stock touched a two-decade high before falling last month.It’s difficult to predict exactly when the buyback money will run out, but SoftBank’s history of purchases offers clues. The company spent on average 200 billion yen a month over the past half a year and 253 billion yen in March alone, its biggest monthly outlay this year. It had just shy of 258 billion yen left in the final buyback tranche as of the end of March.“It’s amazing how much they bought back over the past few months even though the shares are at a record high,” said Kirk Boodry, an analyst at Redex Research in Tokyo. “There hasn’t been a deceleration and that lends credence to the idea that the company will buy back more shares when the allocation is done.”SoftBank has also shown a willingness to make big interventions to bolster the stock against bad news and to build momentum on positive events, at times accounting for as much as 19% of trading volume. It spent over 50 billion yen in a single trading session on Dec. 10. The buybacks sent the shares 11% higher and came a day after Bloomberg broke news about Son debating a new strategy to take his SoftBank private, sparking a rally.The company also spent more than 130 billion yen over 5 business days in mid-April last year, its single biggest week of trading, after forecasting a record annual loss as the value of its startups cratered amid the coronavirus pandemic. When the booming equity markets helped turn the losses into a record profit in the Vision Fund business in early February, SoftBank bought more than 34 billion yen of stock over two days after the results announcement.Overall, SoftBank’s purchases have been effective. For every $1 billion spent on buybacks, the company’s market value increased by more than $6 billion -- until March. That month, the company spent over $2.3 billion only to see its market capitalization slide by almost $11 billion.The coming earnings announcement could offer another opportunity to bolster the share price. SoftBank is likely to report a full-year net income that’s the highest ever for a listed Japanese company in any quarter dating back to 1990, according to data compiled by Bloomberg. Vision Fund profit, supercharged by the successful initial public offering of Coupang Inc., may reach an unprecedented $30 billion, people familiar with the matter said.SoftBank Vision Fund Profit Said to Near $30 Billion on CoupangWhile the profits are largely paper gains on investments, Son has plenty of cash to keep buying back stock. He paid for the original program by offloading about $16 billion of Alibaba stock, an even larger chunk of its stake in T-Mobile US Inc. and some shares of SoftBank Corp., his Japanese telecommunications unit. He then went even further, announcing the sale of Arm, slashing the stake in SoftBank Corp. by about a third and selling a controlling shareholding in phone-distribution company Brightstar Corp. The Japanese conglomerate had 4.45 trillion yen in cash and equivalents as of Dec. 31.Son, who has long railed against the gap between SoftBank’s capitalization and the value of its assets, has flirted with the idea of taking his company private as recently as last March. The buybacks may be part of a multi-year strategy of reducing outstanding shares until the founder has a big enough stake so that he can squeeze out the remaining investors, people familiar with the matter told Bloomberg in December. The proportion of treasury stock held by the company rose from just over 1% to almost 17% in the year since the re-purchases began last March. Combined with his personal stake, Son now controls about 40% of the outstanding shares.SoftBank Is Said to Discuss ‘Slow-Burn’ Buyout to Go Private (2)SoftBank’s stock has climbed more than 160% since the company started buying back shares, but gains have slowed in recent months as the corporate discount shrank. The gap has narrowed from 74% in March 2020 to about 30% without taking capital gains into the account, Jefferies’ Goyal estimates. Boodry at Redex Research sees the discount at about 40% now.The stock will face further headwinds if the sale of Arm to Nvidia falls through, according to Justin Tang, head of Asian research at United First Partners in Singapore. Chinese technology companies including Huawei Technologies Co. are lobbying their government against the transaction, while a regulator in the U.K., where Arm is based, said it plans to intervene “on national security grounds.” At the same time, Arm is mired in a legal battle for control of its China unit with the chief executive, who was fired by SoftBank but has refused to leave.“Unless there is a catalyst to expand its net asset value, it is probable that we will see the discount widening out again,” Tang said. “It still is a conglomerate with a lot of unlisted investments in its portfolio.”(Updates with shares in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- China’s antitrust regulator fined some of its largest tech giants including Tencent Holdings Ltd., Baidu Inc., ByteDance Ltd. and Didi Chuxing for past acquisitions and investments as it stepped up its crackdown on the sector.Pony Ma’s Tencent is being fined 500,000 yuan ($77,000) for its 2018 investment in online education app Yuanfudao, according to a statement by the State Administration for Market Regulation on Friday. Baidu was fined the same amount for its 2014 takeover of Ainemo Inc., a maker of consumer electronics including voice-controlled speakers. The firms are being censured for not seeking prior approvals for the deals -- a violation of country’s anti-monopoly laws -- though the regulator had determined the deals themselves aren’t anti-competitive.Tencent and Baidu join fellow behemoth Alibaba Group Holding Ltd. in coming under fire from the country’s powerful antitrust regulator, as Beijing steps up efforts to rein in its once free-wheeling technology industry. The regulator had last year issued fines against Alibaba as well as Tencent unit China Literature Ltd. for similar violations.“The message is clear that seeking government approvals in deals like these are a must.” said Ye Han, a partner at Beijing-based law firm Merits & Tree, who specializes in antitrust and M&A. “While we haven’t seen cases where companies got broke up or mergers got unwinded, such evaluations are likely going on behind the scene.”Didi Mobility Pte, a unit of ridehailing giant Didi Chuxing, and Japan’s SoftBank Corp. were also issued fines of 500,000 yuan each -- the maximum penalty possible -- for setting up a joint venture without permission. A ByteDance unit and its partner Shanghai Dongfang Newspaper Co. were also penalized the same amounts for a 2019 partnership that created a video-copyright venture. ByteDance said the joint venture has since been canceled.Technology companies like Tencent had previously carried out mega mergers and acquisitions through so-called Variable Interest Entity structures, which operate on shaky legal grounds. The new antitrust rules, accompanied by the fines handed down by the regulators, are a signal VIEs are now under their oversight.What Bloomberg Intelligence SaysTencent’s ability to strengthen its domestic ecosystem through M&A may be significantly weakened on rising anti-monopoly scrutiny, underlined by a 500,000 yuan fine by the State Administration for Market Regulation on March 12 for failing to seek approval for its investment in online education platform Yuanfudao in 2018. While the amount is immaterial to Tencent, retroactive application of new anti-competitive rules announced in November may be a stern warning to toe the line in future.-- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Other companies that were penalized in the latest round include TAL Education Group and Intime Retail Group Co.(Updates with details on ByteDance in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- SofBank Group Corp.’s telecom arm, which on Monday completed the merger of its Japanese internet business with messaging service owner Line Corp., plans to combine the payment apps of those two entities.The company will fold Line Pay into PayPay, backed by SoftBank Corp., its Yahoo Japan unit and India’s Paytm, in April 2022 provided it secures all the relevant regulatory approvals, according to a joint statement from the two payment operators. SoftBank had kept mum on the possibility of a payments merger, saying only it aimed to extract synergies from the overlapping businesses.Under a complex transaction that takes effect on Monday, SoftBank Corp. and Line’s parent Naver Corp. each own half of a newly created A Holdings Corp. That company in turn controls 65.3% of publicly traded Z Holdings Corp., taking SoftBank’s Yahoo Japan and Line’s operations under its umbrella. The deal was targeted for completion by October but got delayed by pandemic-induced market disruptions. It’s also come under attack from overseas hedge funds that said the tender offer price was too low.The name is designed to symbolize everything as in “from A to Z,” reminiscent of Amazon.com Inc.’s motto, SoftBank has said. The letters also signify its focus on artificial intelligence and plans to expand in Asia.PayPay had 36 million users in Japan as of the end of February, while Line Pay had about 39 million. The merger gives PayPay access to over 80 million Japanese users on Line’s messaging service. The former rivals are already combining their respective businesses and Line Pay users will be able to make payments at PayPay locations where QR codes payments are accepted starting second half of April.Masayoshi Son, the SoftBank founder who backs some of the world’s largest startups, engineered the deal to create a Japanese tech champion that can compete with global rivals like Google, Amazon and Tencent Holdings Ltd. The combined company aims to spend 100 billion yen ($939 million) annually on development of AI-powered products.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.