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RPT-BREAKINGVIEWS-Elliott’s SoftBank exit could be premature

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    LONDON, Aug 16 (Reuters Breakingviews) - Masayoshi Son no
longer has an activist at the gates of his $74 billion
technology empire. Elliott Management, Paul Singer’s uppity
hedge fund, earlier this year sold down most of its remaining
stake in Son’s SoftBank Group  9984.T , according to
the Financial Times https://www.ft.com/content/f9d0c388-9cda-4377-9694-f607d86b5591.
 It marks the end of a more than two-year bet, originally worth
$2.5 billion, which was premised on the Vision Fund and Arm
owner narrowing the discount to the sum of its parts by selling
off assets and buying back shares.
    As Breakingviews predicted https://www.breakingviews.com/considered-view/wanted-bold-activist-to-take-on-masayoshi-son
 before Elliott’s stake became public, there was serious money
to be made from closing that gap. Son started liquidating some
assets after the initial Covid panic and used the proceeds for
buybacks, which allowed Elliott to reduce its holding last year
for a $500 million profit, the New York Post reported https://nypost.com/2021/09/20/elliott-management-reduces-stake-in-softbank-makes-profit-despite-chinese-tech-crackdown.
 More recently, however, Son has suffered departures of senior
executives  urn:newsml:reuters.com:*:nL8N2YO4N1, and has been hit by the tech rout,
which erased $40 billion in previously announced gains
 urn:newsml:reuters.com:*:nL4N2ZL08H. Elliott’s decision to sell reflected a loss of
confidence in Son’s ability to lead a turnaround, the FT said.
    The question is whether the activist has given up too
easily. SoftBank last week decided to massively reduce its
holding in e-commerce giant Alibaba  9988.HK   BABA.N , which
amounted to slaying a sacred cow at SoftBank  urn:newsml:reuters.com:*:nL4N2ZN1JV. If
that means Son is serious about a bigger breakup of the group,
Elliott’s exit may come to seem premature. (By Karen Kwok)
    
    Follow @Breakingviews https://twitter.com/Breakingviews on
Twitter
    
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 (Editing by Liam Proud and Pranav Kiran)
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