Japan's SoftBank Group announced Monday that it would spend 500 billion yen ($4.4 billion) to buy back 14.2 percent of its own shares, the company's biggest buyback.
The telecom conglomerate said it would repurchase the shares over a year starting Wednesday. SoftBank’s shares are currently trading at their lowest since its acquisition of U.S. carrier Sprint in 2013.
“The proposed share repurchase will be funded through proceeds from sale of assets and cash on hand, but not through any debt procurement,” SoftBank said, in a statement.
The latest announcement comes just five months after the company’s last stock buyback of around $1 billion worth of shares in August, which CEO Masayoshi Son described as a response to SoftBank's lackluster share price.
SoftBank’s stake in Sprint, which it bought for $22 billion, is now worth $8.2 billion as the Kansas company’s stock shed about 60 percent of its value in two years and lost its place as the third-largest U.S. carrier to T-Mobile U.S. Inc.
Masayoshi Son — one of Japan’s most popular entrepreneurs — said at the time of the acquisition that he had a 300-year plan to turn SoftBank into an internet empire unrivaled in “profit, cash flow and market value.”
Instead, losses have mounted at Sprint while SoftBank found itself saddled with about $100 billion of debt, according to data compiled by Bloomberg. In addition, investor concerns have driven the company’s stock down 28 percent since the start of the year.
The decline has pushed SoftBank’s market value below that of its stake in Chinese e-commerce giant Alibaba Group Holding earlier in January. The company’s market capitalization fell to $46.7 billion while the Tokyo company’s stake in Alibaba is worth about $55 billion, according to its website.
“This is a good buyback, considering how low their valuation has fallen,” Atul Goyal, an analyst at Jefferies Group, told Bloomberg.