SoftBank share buyback? Hey Masa..... Not another Craig, Fruck Hu move?
Sprint has debt payments coming due and Softbank is spending about $4 billion to buy back shares of Softbank stock. Softbank has close to an 85% ownership stake in sprint....is Masa tone deaf?
Central to the stock’s under-performance has been Sprint, SoftBank’s biggest overseas investment after its stake in China’s Alibaba. Sprint’s shares have fallen 27 percent this year, while those of Alibaba have fallen 25 percent.
Sprint, which had been hemorrhaging cash over the past year, increased its cash and equivalents by almost 12 percent to $2.2 billion in the December quarter. The U.S. company also increased its profit forecast, calling for earnings before interest, tax, depreciation and amortization of as much as $8 billion in fiscal 2016.
“This is a big surprise for the market,” said Satoru Kikuchi, an analyst at SMBC Nikko Securities Inc. in Tokyo. “It will take about a year for the markets to believe in Sprint’s turnaround scenario.”
SoftBank’s buyback can be compared with the buyback strategy of Berkshire Hathaway Inc., said Jefferies’ Goyal.
The company headed by Warren Buffett, for whom Son has publicly expressed admiration, has said intrinsic value, a metric that accounts for the amount of cash that can be taken out of a business in its lifetime, is the best tool for evaluating the company.
“They don’t need shares to acquire companies, but the sum of parts is much greater than the current price, which is absurd,” Goyal said.
The most in more then 7 years? Didn't SB buy Sprint in 7-2013? I guess Sprint isn't really da red headed stepchild after all....
Softbank Corp. climbed the most in more than seven years after the company said it will spend a record 500 billion yen ($4.4 billion) buying back stock.
The stock rose as much as 15 percent to 5,040 yen as of 9:26 a.m. in Tokyo on Tuesday. SoftBank will purchase as many as 167 million shares, or 14.2 percent of its stock, using cash holdings and the proceeds of asset sales, the Tokyo-based company said in a statement Monday.
how is AT&T and DTV working satellite into T's terrestrial network? SB and S must be watching the merged companies very closely to see how they get the best use for the almost $50 Billion AT&T spent to buy DTV....
your new here.....but what a concept.....Softbank, per you, will sell sprint shares on the open market for 50 to 60% lower then what they initially bought them for in 2015......you should really start some type of pay pal trading scheme to help readers here make lots of money......
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Member since: Feb 16, 2016
Too bad SB didn't use some of the cash on hand to pay down some of Sprint's debt......
Global Credit Research - 16 Feb 2016
Tokyo, February 16, 2016 -- Moody's Japan K.K. says that the ratings of SoftBank Group Corp.("SoftBank" Ba1 stable) will not be immediately impacted following its announcement to buy back its own shares.
On 15 February 2016, SoftBank said it plans to buy back up to 14.2% of its outstanding shares for a maximum JPY500 billion (around $4.4 billion) through February 2017.
"The share buyback is credit negative because this will consume a portion of cash on hand and /or liquid assets, which we consider to be important rating factors", says Motoki Yanase, a Moody's Vice President and Lead Analyst for SoftBank.
"However, there is no immediate impact on SoftBank's rating or outlook, because the company does not intend to fund the share buyback with incremental debt", adds Yanase.
SoftBank has a significant unrealized gain from its investments, most of which relate to its approximately 32% shareholding in Alibaba Group Holding Limited (A1 stable). Additionally, SoftBank's high level of cash on hand has been increasing as the company leverages the favorable interest rate environment in Japan to prepare for its future refinancing and investment needs.
SoftBank's adjusted gross debt to EBITDA was 5.0x as of 31 December 2015. This is high for its rating. At the same time, SoftBank had about JPY2.8 trillion of cash on hand. Its businesses also generate stable operating cash flows, which partially mitigate such a high leverage.
We will observe SoftBank's means of funding the share buyback. We view any potential reduction in cash on hand more negatively than a reduction in sellable assets.
What Could Change the Rating - Up: The ratings could be upgraded if SoftBank's improves its profitability and debt leverage such that adjusted EBITDA margin stays above 35% and adjusted gross debt/EBITDA falls below 3.5x. In addition, the company will need to demonstrate an excellent liquidity profile and access to the capital markets.
SB holds about a 34% stake in BABA........
Alibaba Group Holding Limited (BABA) -NYSE In Watchlist
65.57 Up 4.68(7.69%) 9:59AM EST - Nasdaq Real Time Price
Softbank getting some good mileage on the buyback plan....
SoftBank Group Corp. (SFTBF) -Other OTC Watchlist
44.44 Up 6.24(16.33%) 9:44AM EST
tmus earnings report tomorrow......Cramer is wet to the knees on the expectation that Legere will be on his cnbc show making all kinds of fun of S, T and VZ.....
T-Mobile (NYSE:TMUS) isn't likely to surprise anyone when it reports its fourth-quarter earnings tomorrow, analysts from Barclays and New Street Research said in separate research notes. So investors will likely to be looking for clues about the company's strategy as it prepares for the FCC's upcoming incentive auction of 600 MHz spectrum.
The nation's third-largest mobile operator released preliminary figures last month indicating it would post 4.5 million net adds during the final quarter of 2015, topping estimates of 3.8 million to 4.2 million. And it signaled EBITDA for the fiscal year would come in at the top half of its guidance of $6.8 billion to $7.2 billion, excluding the impact of leasing and its Data Stash program.
Both New Street and Barclays indicated that while carriers are increasingly having to choose between growing their subscriber bases and maximizing revenues, T-Mobile appears well positioned to continue to make progress in both areas, at least in the short term.
yep, smart move......Sprint declares BK and then SB and Son lose all their equity.....Brilliant!
wonder what this is all about? Hey Marcelo....what's behind this? All your traveling lately, who have you been meeting with? GOOG? FB? AAPL?
The genius, Masa Son, and his Global enterprise SoftBank, hold about a 34% stake in Alibaba....
Alibaba buys nearly 33 million shares of Groupon
NEW YORK (AP) — Alibaba has bought nearly 33 million shares of online daily deal service Groupon.
Groupon Inc.'s stock jumped more than 16 percent in Tuesday premarket trading.
The purchase gives the Chinese e-commerce powerhouse about a 5.6 percent stake in Groupon. Alibaba disclosed the purchase in a regulatory filing on Friday.
The news comes shortly after Groupon reported a fourth-quarter adjusted profit and revenue that beat analysts' expectations.
Last month Alibaba Group Holding Ltd. reported better-than-expected third-quarter results as it benefits from a shift to mobile spending and a growth in users.
Shares of Chicago-based Groupon added 48 cents, or 16.6 percent, to $3.37 before the market open on Tuesday.
Softbank owns close to 85% of Sprint....
Morgan Stanley wrote:
Softbank’s press release cites cash on hand and sale of assets as the means to fund the buyback, and it’s unclear whether the company is trying to maintain balance sheet health or demonstrate its results in monetizing business investments. Between March 2015 and end-February 2016, Softbank is receiving ¥300bn from selling off assets and from dividend income, which indicates the company will be cashing out investments in late February (including selling off assets). GungHo and Alibaba are companies which Softbank holds over ¥50bn in stock, and Supercell (F14 sales of ¥250bn, OP ¥56bn) is among the companies that Softbank had a stake in for a relatively long duration and has been monetizing.
If SoftBank ends up funding this buyback with mostly asset sales, it can unleash more value.
So, it appears the mothership Softbank is available to support sprint during Marcellos transformation process
Fitch Rates Sprint's $1 Billion Senior Notes 'B+/RR4'; Outlook Stable
February 19, 2015 04:59 PM Eastern Standard Time
CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned a 'B+/RR4' rating to Sprint Corporation's (Sprint) proposed $1 billion senior unsecured notes due 2025. The proceeds from the offering will be used for general corporate purposes, which may include, working capital requirements, retirement or service requirements of outstanding debt and network expansion and modernization. The Rating Outlook is Stable. A full list of ratings follows at the end of this release.
The senior notes will be fully and unconditionally guaranteed on a senior unsecured basis by Sprint's wholly owned subsidiary, Sprint Communications, Inc.
KEY RATING DRIVERS
--Fitch views a strong strategic linkage exists between Softbank and Sprint given the numerous affirmative steps taken to strengthen the relationship since providing tangible support of a $5 billion capital infusion at the time of the acquisition. As such, the ratings reflect that Softbank may consider additional financial assistance such as loans in the event Sprint required funding outside of current plans to develop its business. Thus, Softbank's implied support materially benefits Sprint's IDR and reduces the importance of Sprint's standalone financial position relative to the current ratings on Sprint's credit profile.
--Fitch believes Sprint's standalone financial profile has deteriorated to the low single 'B' rating. Sprint's financial profile will also remain weak for an extended period due to the time required to address the numerous executional and operational challenges which has caused the company to seek additional liquidity to fund operating deficits. Additionally, Sprint must combat an intense competitive environment that experienced more pricing actions during 2014 than at any other time and
Sprint and T-Mobile are definitely closing the gap....
Putting the results in perspective
While Verizon and AT&T can continue to justifiably claim network superiority, the reality is that their lead is actually not as impressive as it seems because all four networks have improved dramatically. In the first half of 2014 -- just 18 months ago -- Verizon led the report with an 81.6 in overall performance. As you can see above, only T-Mobile falls under that number, but only by a little.
T-Mobile, despite coming in last overall, tested strong in metro areas with RootMetrics saying its "network still offered very fast speeds and improved data reliability results." Sprint was also praised with the research firm commenting that "it's clear that Sprint's investments are paying dividends for consumers."
How it works
RootMetrics does its own testing. According to the report, that involved driving over "231,000 miles while testing performance on highways and in big cities, small towns, and rural areas across the U.S." To compose the study researchers collected approximately "3.8 million test samples while testing performance while driving, at stationary outdoor locations, and at more than 6,600 indoor locations."
Analysis: T-Mobile could face crush of competition in crucial U.S. airwaves auction
By Malathi Nayak
NEW YORK (Reuters) - A few months ago, T-Mobile US Inc looked set to dominate a race for airwaves reserved for smaller, emerging players in an upcoming U.S. auction, a feat that would help it compete with U.S. wireless heavyweights Verizon Communications and AT&T Inc.
In part of a low-frequency airwaves auction, which includes spectrum set aside for non-dominant carriers, No.3 U.S. wireless player T-Mobile was the only major bidder in sight.
But new competitors for the spectrum are surfacing, which could dash T-Mobile’s chances of acquiring enough spectrum at a price it can afford. Its executives have called the auction a "game changer," as it plans to expand the reach of its network to better compete with bigger rivals.
Silicon Valley, cable companies and financial players have signaled interest in the auction, which starts in March and features the broadest array of potential bidders since at least 2008.
"Where it was T-Mobile as the 600 pound gorilla and a bunch of monkeys, the gorilla wins. But now you have orangutans and some other large apes in the fight," said Recon Analytics analyst Roger Entner. T-Mobile is expected to pay more for the reserved spectrum in the face of tighter competition, analysts said.
The U.S. Federal Communications Commission's auction involves selling valuable low-frequency airwaves taken from TV broadcasters who do not require them anymore to companies who want to build new wireless networks or improve their existing coverage.