SoftBank hits new 20-year high as Uber gains; DoorDash plans IPO

Tokyo

SOFTBANK Group rose to a fresh 20-year high as the recent stock market surge boosted the value of holdings like Uber Technologies and brightened the prospects for portfolio companies going public.

The US ride-hailing pioneer recovered from stumbles after its initial public offering last year and its shares have gained more than 70 per cent this year. Softbank's 13 per cent stake is worth about US$11 billion. The Japanese company is also a major shareholder in US delivery giant DoorDash, which filed to go public this month. SoftBank's stock gained 2.3 per cent to 7,250 yen on Friday, the highest level since March of 2000 in the midst of the dot-com boom.

Citigroup earlier this week raised its target price on SoftBank to 11,000 yen from 10,200 yen, citing improved earnings prospects at the Tokyo-based company's investments business. Nomura Holdings raised its target to 9,100 yen from 8,190 yen citing the same reason. Both brokerages have a "buy" rating on SoftBank.

A series of missteps in the investment business including a failed WeWork IPO and the impact of the Covid-19 outbreak led to record losses last fiscal year. SoftBank founder Masayoshi Son responded by unveiling plans to sell 4.5 trillion yen (S$57.9 billion) in assets and buy back a record 2.5 trillion yen of his own stock. Shares are up more than 160 per cent from their March low.

"We see plenty of room for the shares to rise against a backdrop of aggressive share buybacks and efforts to improve financial health," Citigroup analyst Mitsunobu Tsuruo wrote in the report. BLOOMBERG