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Shuli Ren

SoftBank Buyback Magic May Soon Wear Thin

There are risks for the Japanese technology investor in deciding to spend $5.5 billion on its own stock.

For his next trick, a disappearing ETF?

For his next trick, a disappearing ETF?

Photographer: Kiyoshi Ota/Bloomberg

Day traders may be rejoicing at SoftBank Group Corp.’s biggest ever buyback, but for loyal believers in Masayoshi Son’s magic wand, it’s another worrisome development. 

SoftBank unveiled the repurchase program last week, promising to spend as much as 600 billion yen ($5.5 billion) on its own stock over the coming year. That would be enough to buy 71 million shares, or 6.5 percent of the total, based on the closing price on Feb. 5. There’s an upper limit of 112 million shares, or 10.3 percent of the total.