SoftBank shares climb up to 20% following buyback announcement

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Softbank Group Corp stock climbed 20% on Tuesday as it extended a two-day rally after the company announced a $41 billion in asset sales and a record share buyback to support its declining share price.

Softbank shares closed with a 19% gain on Monday following an announcement to repurchase 4 trillion yen ($18 billion) of shares added to the 500 billion yen buyback earlier this month.

Chief Executive Masayoshi Son’s entry in investing via Softbank’s $100 billion Vision Fund weakened the firm’s shares as its major bets were spoiled. This prompted a sell down of various parts of its portfolio and buybacks.

Selling down the conglomerate’s stake in domestic wireless carrier Softbank Corp to half could raise up to $10 billion and secure control to the company, said Jefferies analyst Atul Goyal.

Softbank owns 25% of Alibaba Group Holding Ltd., the Chinese e-commerce giant that currently holds a value of $120 billion. Alibaba’s shares listed on the NYSE have dropped 17%.

A source familiar to the matter said that a partial sale of Softbank’s stake in Alibaba is possible. The shares are likely to be sold in the open market instead of back to the company. The source, who refused to be identified, said that shareholders would not be pleased if Alibaba bought back its shares, adding that the e-commerce giant isn’t in a rush to share. While this is the case, the multinational conglomerate is.

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