SoftBank stock falls, company forced to sell core assets and 5% of domestic telco

SoftBank Group Corp stock continued to fall after the company’s share closed down 0.8% on Friday. As part of its plan to accumulate $41 billion by selling some of its assets, SoftBank announced it is going to sell 5% of its domestic telco SoftBank Corp.

The deal is due to be closed on May 26 and the price of the 240 million shares that are about to be sold is yet to be determined. Currently, a 5% stake is evaluated to have a price of 330 billion yen ($3.1 billion).

After the sale is complete, SoftBank Group is said to be left with a 62,1% ownership stake in the third largest wireless carrier in Japan.

The founder of the company, Masayoshi Son, said he plans to sell off $42 billion worth of assets that will be used for stock buybacks and tackling company debts. It has been said that there are also talks about the company selling some of its stakes in T-Mobile US Inc, which roughly amount to $20 billion.

After it became clear that Jack Ma is stepping down from his position on SoftBank’s board, the company also shared that it plans to sell some of its shares in Alibaba Group Holding Ltd. SoftBank plans to raise about 1.25 trillion yen by selling a part of the 25% shares it owns in the Chinese company.

SoftBank stated a record annual loss just a few hours after the news of Ma’s departure. As an attempt to earn back the trust of investors, Mr. Son stated his plans to sell some of the core assets from SoftBank’s portfolio, which also include 5% of its domestic telco.

Analyst stock price forecast and recommendation

According to CNN Money, the 13 analysts who provide 12-month stock price forecasts for SoftBank Group Corp have determined a median target of $31.27, with a high estimate of $37.06 and a low estimate of $19.78. The median estimate represents a +47.84% increase from the last price of $21.15.

The same media is also offering the recommendations of 13 analysts who participated in a SoftBank Group Corp stock poll. Among them, 10 analysts rated the stock as “Buy” and 3 gave it an “Outperform” rating.