Activist investor Elliott clearance Softbank Corp.: losing confidence in son

On the morning of August 17, Beijing time, it was reported that Elliott Management, an American hedge fund, had sold almost all its shares in Softbank Corp. of Japan. This is another sign that investors are uneasy about the fate of the world's largest technology investment group.

Elliott has decided to end its investment and support for Softbank Corp. over the past years, according to people familiar with the matter. Previously, the company held a stake of as much as $2.5 billion in Softbank Corp.. A person familiar with the matter said Elliott's move was due to a loss of confidence in son, the billionaire founder of Softbank Corp., and his ability to bridge the huge gap between the actual value of Softbank Corp. 's assets and the company's market capitalization.

Elliott manages about $56 billion in assets. It is not clear the exact scale and timing of Elliott's sale of Softbank Corp. 's stake. The sales took place earlier this year, when technology stocks, including Softbank Corp., suffered a massive sell-off and share prices plummeted, according to sources.

For now, Elliott declined to comment on the news.

In February 2020, Elliott disclosed for the first time that it had a $2.5 billion stake in Softbank Corp.. But last year Elliott sold a large stake in Softbank Corp. at a profit, according to people familiar with the matter.

For Softbank Corp., Elliott almost completely cleared its shares is another blow. Softbank Corp. said earlier that he would slash costs and historically sell his shares in Alibaba to cope with the growing business pressure.

Last week, Softbank Corp. reported a record quarterly loss of $23 billion. Mr son said he was "ashamed" of the performance. Softbank Corp. 's share price has fallen 10 per cent in the past year, 45 per cent below its all-time high in March 2021.

Softbank Corp. website shows that if investors are valued based on the company's net asset value, then Softbank Corp. 's reasonable share price should be about twice the current 5900 yen per share. Elliott also invested in Softbank Corp. because it believed Softbank Corp. could close the gap through share buybacks, improved corporate governance and asset sales.

In November last year, media reported that before starting to sell Softbank Corp. shares, Elliott had been disappointed that Softbank Corp. did not start a new round of share buybacks. Other investors share the same concerns. Instead, son chose to continue to invest billions of dollars in early-stage companies through his investment business.

At the time, Elliott urged son to find ways to boost Softbank Corp. 's share price and improve corporate governance through buybacks. Elliott's investment in Softbank Corp. was led by Gordon Singer. He is the head of Elliott's London office and the son of founder Paul Paul Singer.

Softbank Corp. 's share price plummeted in March 2020, when concerns about the epidemic peaked. According to media reports at the time, Elliott discussed privatising Softbank Corp. during an emergency weekend meeting, but Softbank Corp. eventually launched a $41 billion asset disposal plan and a $23 billion share buyback plan. Elliott increased its investment before and after Softbank Corp. 's share price plummeted, and Softbank Corp. 's share price rose from 2687 yen in March 2020 to a high of 10635 yen in March 2021.