Softbank Disappoints Investors And Analysts With Lack Of Buyback Post Q2 Results

Softbank Group Corp's SFTBF SFTBY shares plunged as much as 12% Monday in its most significant intraday drop since the outbreak of the pandemic in early 2020, following a lack of widely-expected stock buyback, Bloomberg reports.
The Vision Fund segment posted a $7.2 billion loss in the July-September quarter, following a record 2.33 trillion yen ($17 billion) loss in the preceding period.
The sliding startup valuations forced the biggest technology investor into defensive mode and virtually halted investments.
SoftBank's stock price increased in the early weeks of the current quarter as the Tokyo-based company raced to complete two share repurchases. The buybacks included a 1 trillion yen buyback program announced last year and a 400 billion yen program announced in August.
The report added that a lack of a buyback prompted analysts at Deutsche Bank, CLSA, and Jefferies to downgrade their ratings on the stock.
Citi assigned SoftBank a "High Risk" rating, citing capital market uncertainty and related impact on the company's earnings.
"We were looking for another round of buyback announcement, but there was none," Jefferies analyst Atul Goyal wrote. "We believe the risk-reward has now become unfavorable and asymmetric."
While further asset sales may result in future buybacks, the company is likely to sit still for now, given its recent stock performance, the report cited Deutsche Bank's Peter Milliken.
Price Action: SFTBF shares closed lower by 2.81% at $47.65 on Friday.
Photo Via Wikimedia Commons

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