SoftBank Shares Surge 3% In Tokyo On Plans To Shed $13.9B Telecom Subsidiary Stake

The shares of SoftBank Group Corp. SFTBY surged in Monday's trading session on the Tokyo stock exchange after the company announced it was shedding 21.7% of its stake in telecom subsidiary SoftBank Corp.

What Happened: SoftBank said it would offer up to 1.03 billion shares in the telecom unit, including 100.5 million shares in an over-allotment option for underwriters, in the secondary offering. The shares are worth $13.9 billion, based on Friday's closing price.

The Masayoshi Son-led group would still own 1.9 billion shares in SoftBank Corp. after the conclusion of the secondary offering, accounting for about 40.4% of the telecom subsidiary's stock.

Why It Matters: SoftBank said the offering will help fund the planned repurchase of its own shares worth up to $42.6 billion (JPY 4.5 trillion).

Jefferies analyst Atul Goyal noted that the Son-led venture capital firm "is manifesting a very disciplined approach to managing its balance sheet (in a welcome change)," Reuters reported.

SoftBank reported an earnings beat for its first-quarter this year, after its Vision Fund investments like Uber Technologies Inc. UBER and WeWork drove losses in the previous two quarters.

The Tokyo-based firm is also betting on stocks like Amazon.com Inc. AMZN, Alphabet Inc. GOOGL GOOG, Netflix Inc. NFLX, and Tesla Inc. TSLA, a move that could balance its backing of ambitious technology startups.

Price Action: SoftBank shares traded 3% higher at $62.43 in Tokyo at press time on Monday.

The company's stock closed 0.4% lower at $30.63 in the U.S. OTC market on Friday.

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