SoftBank should be better off as a private company, says analyst

SoftBank Group Corp. would be better off as a private company resurfaced after the Japanese investment powerhouse posted a record $23 billion loss.

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It will look more like a pure investment house as it continues to buy back its own stock and sell or pare assets, including its stake in Alibaba Group Holding Ltd.

Satoru Kikuchi, SMBC Nikko analyst, wrote that there isn't a reason to be listed on the stock market. In the not-too distant future, changes could be made in the very form of the company, for example an MBO. SoftBank founder Masayoshi Son, the company's top shareholder with a near 28% stake as of March 31, has debated the idea of going private with his inner circle for at least five years. When SoftBank's shares fell in 2020 at the beginning of the coronavirus epidemic, he began conversations with advisors and lenders including Elliott Management Corp. and Abu Dhabi sovereign wealth fund Mubadala Investment Co., according to Bloomberg News.

The speculation evaporated after Son announced plans to sell $43 billion in assets to pay down debt and buy back stock. The billionaire, who said in February 2020 he thought SoftBank was better off as a public company, is focused on getting chip linchpin Arm Ltd. publicly listed, a landmark deal that could re-establish SoftBank's credentials in the ailing global tech market.

In the past few years, the company has committed to a series of big buybacks to boost its stock price. It said this week it would buy up to 400 billion yen $3 billion of its own shares, in addition to a program to buy back up to 1 trillion yen worth of its stock through September. Its stock price is down about 23% from a year ago, against a little-changed benchmark, the Topix index.

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