SoftBank’s (SFTBY) American depositary receipts surged on Monday after the Japanese tech group reported a massive quarterly loss but said its share price is undervalued and it plans to buy back nearly 15% of its shares.
SoftBank’s ADRs at last check were up 8.4% at $29.54. They touched a 52-week high $50 in late February.
The company said it slumped to a quarterly loss as its Vision Fund unit took a $10 billion hit from a decline in the share prices of its portfolio companies.
But Softbank also said it plans to spend up to 1 trillion yen ($8.84 billion) buying back its stock.
Overall, SoftBank posted a net loss of 398 billion yen ($3.5 billion) compared with a profit of 628 billion yen a year earlier.
Vision Fund’s investment loss totaled 1.17 trillion yen, due in large part to steep declines in the value of its stakes in the likes of Alibaba (BABA) - Get Alibaba Group Holding Ltd. Report and Didi Global (DIDI) - Get DiDi Global Inc. Report.
China’s broader crackdown on tech firms also weighed on the results, SoftBank said.
SoftBank has been raising capital by trimming stakes in companies such as ride-hailer Uber Technologies (UBER) - Get Uber Technologies, Inc. Report and food delivery firm DoorDash (DASH) - Get DoorDash, Inc. Class A Report following the expiry of lockup periods.
The group has returned $9.8 billion to investors and is focusing on investing through its second Vision Fund, which has $40 billion in committed capital from SoftBank and from Softbank Chief Executive Masayoshi Son.
The second fund had invested $33.5 billion in 157 startups at the end of the quarter. Eight of those firms have already listed.