- 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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