Masayoshi Son, who counted Steve Jobs as a friend, mirrored the late Apple Inc. founder on Monday when he kept Softbank Group Corp. investors waiting nearly two hours before revealing his "one more thing” after quarterly results were disclosed — a ¥1 trillion ($9 billion) share buyback.
Son, the company’s founder and chairman said that as one of the shareholders, he was "delighted.” Investors, starved of buybacks for the past six months, agreed, sending shares 11% higher on Tuesday in Tokyo, before running back some of those gains with a drop of as much as 5.1% on Wednesday. History indicates that repurchases need to keep coming for any gains to be sustained.
"The stock tends to perform during the buybacks,” wrote Atul Goyal, an analyst at Jefferies, in a note on Tuesday. That might be understating the connection: in the past five years, SoftBank has outperformed during periods of share repurchases, but dropped or stayed largely in line with the Japan benchmark when not supported by the equity action.