Softbank’s Son transforms US$5.5b to US$17b overnight

TOKYO • Call it the Masayoshi Son (picture) mathematical distortion eld.

The founder of SoftBank Group Corp added about ¥1.94 trillion (US$17.6 billion or RM71.75 billion) to the market value of his company yesterday — by unveiling a plan to buy back shares worth less than a third of that amount.

Based on his own stake, Son’s net worth rose by about US$5 billion. His fortune was estimated at US$14 billion before yesterday’s rally, according to the Bloomberg Billionaires Index.

The billionaire is no stranger to funny math. On Wednesday, he opened his earnings presentation with a riddle: “25 – 4 = 9?”.

The formula is the ¥25 trillion value of SoftBank’s assets minus ¥4 trillion in debt, far from being equal to its market capitalisation of ¥9 trillion. It was designed to capture Son’s longstanding argument that SoftBank’s share price doesn’t reflect the value of its business and investments, a gap he’s been trying to close for years.

Even after yesterday’s boost, SoftBank’s total value is a long way from Son’s goal.

The shares of SoftBank closed at ¥9,962 yesterday, still a 50% discount to Son’s sum-of-the-parts calculation that puts shareholder value at ¥20,055 a share.

The company plans to buy back as much as ¥600 billion starting yesterday through the end of January next year, and the stock will be retired. SoftBank’s shares jumped by their daily limit, gaining 18% in Tokyo yesterday, the most in a decade. — Bloomberg