SoftBank Chairman and CEO Masayoshi Son has backed up his recent bullish statements about Sprint's long-term potential with an additional purchase of Sprint shares that takes SoftBank's stake in the US operator to almost 80%.
Through a subsidiary called Galaxy Investment Holdings, SoftBank Corp. , which acquired its majority stake in the US operator in July 2013, purchased an additional 22.87 million Sprint Corp. (NYSE: S) shares, equivalent to a 0.58% stake, for $86.9 million. That takes SoftBank's total holding to 3,173,958,465 shares, or 79.99% of all Sprint stock. (See Softbank Closes on Sprint Acquisition.)
The investment is "intended to increase the Company's beneficial ownership in Sprint," SoftBank noted in an official statement, and is set to be followed by further similar additional share purchases, though SoftBank says that it "does not intend to increase its ownership of Sprint outstanding common stock to 85% or more." (Breaching that level would make Sprint a candidate for delisting from the NYSE.)
SoftBank added that it has "dedicated significant resources to optimizing Sprint's network strategy and is supporting the development of innovative lease financing structures. In light of these and other turnaround initiatives, the Company is confident in Sprint's future prospects, and therefore decided to carry out the Additional Purchases."
The move comes days after Son joined Sprint CEO Marcelo Claure on the US operator's fiscal first-quarter earnings call and talked of plans for "a big turnaround" at Sprint, which was then followed by the launch of the operator's Open World service plan. (See Sprint Promises Better LTE on Lower Capex and Sprint Follows T-Mobile Across the Borders.)
That came a day after Claure unveiled a new top team. (See Sprint Swaps in a New CFO, COO & CTO.)
It also follows some expression of doubts about Sprint's potential in the US media, including this Wall Street Journal article.
Sprint's share price closed Wednesday at $3.88 but has gained 5.7% to $4.10 in pre-market trading this morning.
— Ray Le Maistre, , Editor-in-Chief, Light Reading