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SoftBank

SoftBank CEO battles shareholders over more buybacks

Son faces calls for returns as group pours another $10bn into second Vision Fund

CEO Masayoshi Son speaks during SoftBank's online annual meeting with shareholders on June 23.

TOKYO -- SoftBank Group Chairman and CEO Masayoshi Son brushed off calls from shareholders to boost dividends and buy back more shares at the investment group's annual general meeting on Wednesday, amid a slump in its stock price.

The calls come only a month after SoftBank completed a 2.5 trillion yen ($22.5 billion) buyback and as SoftBank pours more capital into startups. The company committed another $10 billion to Vision Fund 2, bringing its total size to $40 billion, according to its annual securities report filed on Wednesday. The fund size was $10 billion at the end of last year. 

The moves highlight the gap between some shareholders' desire for solid returns via buybacks -- a way for a company to try to boost its share price and return money to shareholders -- and Son's ambitions for making profitable investments with SoftBank's cash.  

"Buybacks are constantly on my mind as an important option," said Son, responding to a question submitted online on whether there are no plans for additional buybacks. "But when and at what scale needs to be considered while looking at our financial balance and investment opportunities."

Son told Nikkei in May he is focused on doubling the number of Vision Fund-backed startups to 500 companies.

He appeared frustrated when the next question suggested that buybacks were the only way to boost the company's share price. "I wish you could view us from a longer-term perspective," he said. "Won't you do [buybacks] anymore, haven't you done it yet, how much will you do -- it is a bit sad if you are only concerned about these issues."

The next question also suggested that SoftBank increase dividends or its dividend payout ratio.

SoftBank's stock price has fallen more than 15% since May 12, when it reported its biggest-ever net profit, 4.99 trillion yen, thanks to a string of blockbuster IPOs of Vision Fund investees.

On Wednesday, Son said the value of SoftBank's portfolio has declined by about 1 trillion yen, to 25 trillion yen, since the end of March but that its market cap has dropped nearly 10 trillion yen. "It has declined too much. ... There is a 50% discount" to the group's net asset value, he said.

Son has said this so-called conglomerate discount will narrow as more of its portfolio companies go public. But the gap has persisted, fueling speculation over whether Son, who is by far SoftBank's largest shareholder, will take the company private.

"No comment," Son said when asked the question on Wednesday.

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