SoftBank to retire treasury shares worth 16% of outstanding stock 

The Japanese investment conglomerate appears to have drawn a line now after spending $20 billion over a year on a buyback push to support its struggling share price 

by Sean OMeara
SoftBank to retire treasury shares worth 16% of outstanding stock 
The cancellation of the treasury shares will boost the ownership of its top shareholder, founder and chief executive Masayoshi Son. Photo: Reuters

SoftBank has announced it will be retiring treasury shares worth 16.3% of its outstanding stock after a buy-back programme which has cost it $20 billion over the last year.

The cancellation will leave the Japanese investment conglomerate holding, as treasury stock, 0.6% of total shares issued. This follows the group's largest-ever buyback increased its holdings after it had been forced to step in to support its share price.

A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market.

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The move is "probably not a signal either way on future buybacks," said analyst Kirk Boodry at Redex Research, adding it is in line with industry practice. 

SoftBank's $100 billion Vision Fund – the world's largest technology-focused venture capital fund – is widely expected to post its largest-ever quarterly profit on May 12 with the listing of portfolio company Coupang Inc a contributory factor.

And the cancellation of the treasury shares will boost the ownership of its top shareholder, founder and chief executive Masayoshi Son, who holds a 25% stake. 

The largest-ever gap between the value of SoftBank's assets and its share price last March led to debate over whether the group would go private before buybacks drove a recovery in the stock price.

  • Reporting by Reuters

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