Topline: Billionaire Paul Singer’s activist hedge fund, Elliott Management, which has a history of winning proxy fights, has built up over a $2.5 billion stake in Japanese conglomerate SoftBank Group, with the aim of pushing the tech giant to make changes that would boost its share price, the Wall Street Journal first reported on Thursday.
- Elliott Management has quietly built a stake in Japan’s SoftBank Group, now worth more than $2.5 billion, as it looks to push for stock buybacks and improved corporate governance in an effort to boost the tech giant’s share price, according to the Journal.
- While SoftBank shares surged 9% on the news Thursday, the stock has lagged in recent months, especially after taking big hits on its investments in losing startups like WeWork. Before today, SoftBank shares were down almost 15% over the last six months.
- New York-based Elliott Management is one of Wall Street’s largest activist hedge funds—with some $35 billion in assets under management. The fund has a veteran track record for influencing company management and winning proxy battles.
- It was founded in 1977 by billionaire Paul Singer, who is known for his high-profile and often combative dealmaking. Forbes estimates his net worth at $3.5 billion.
- Top management from Elliot has already met with SoftBank founder Masayoshi Son and his deputies; discussions between the two companies have so far gone well, sources told the Journal.
- Elliot is reportedly pushing SoftBank for improved corporate governance—including more transparency on investment decisions at its $100 billion Vision Fund, as well as $10 billion to $20 billion of share buybacks to help boost the company’s market value.
Big number: SoftBank is one of Elliott’s largest positions, with the investment being equivalent to around 3% of SoftBank’s overall market value ($93 billion), sources told the Journal.
Crucial quotes: “We are in complete agreement that our shares are deeply undervalued by public investors. SoftBank welcomes feedback from fellow shareholders,” a SoftBank spokeswoman told the Wall Street Journal.
“Elliott has engaged privately with SoftBank’s leadership and is working constructively on solutions to help SoftBank materially and sustainably reduce its discount to intrinsic value,” a spokeswoman from Elliot said.
Tangent: Late last year, Elliott also revealed a $3.2 billion activist stake in AT&T. The hedge fund sent a sharply worded letter to the company’s board in December asking AT&T to stop buying new businesses, raise its dividend, buy back more shares and cut costs.