Sprint chairman Masayoshi Son has turned from potential seller to buyer of Sprint Corp. with an $87 million purchase of the company’s shares in the open market.
The purchases, by Son’s Tokyo-based SoftBank Corp., were small compared with the roughly 80 percent of Sprint that SoftBank already owned.
At the same time, picking up more shares offered a gesture of good faith following last week’s revelation that Son had been trying to sell the Overland Park-based wireless company.
Son told Wall Street analysts that he had lost confidence in Sprint’s future after Washington regulators shot down his plan to merge the company with its then-smaller rival T-Mobile US Inc. Son then said he had rediscovered his confidence, said he did not want to sell Sprint and endorsed the turnaround plans of Sprint chief executive Marcelo Claure.
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Claure had told The Star that he asked Son for his backing and for an assurance that “he would stop trying to sell Sprint.”
This week’s stock purchases don’t give Sprint additional capital. But SoftBank said last week it would back new lease financing that would help Sprint with its cash needs. SoftBank cited that plan in the announcement on its website about the stock purchases.
SoftBank “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 English version of SoftBank’s announcement said.
Jennifer Fritzsche, an analyst at Wells Fargo Securities, said the stock purchase, Son’s renewed confidence and new stock incentives given to Claure were good signs for other Sprint stockholders.
“It has not been a fun few months for Sprint,” Fritzsche said in a note to clients. “But regardless of the fact, if Masa (Son) wanted to sell or didn’t is irrelevant at this point, in our view. Between his stock purchase … comments on the last earnings call and offering a clear incentive to his CEO to drive this stock price higher — he and SB (SoftBank) are now fully engaged, it seems.”
SoftBank, which Son founded and heads as chief executive, bought an additional 22.9 million shares in the open market Monday, Tuesday and Wednesday. The purchases were disclosed in a filing with the Securities and Exchange Commission.
Sprint shares were unchanged on Wall Street, closing at $3.88. The stock has lost a third of its value in the last 12 months.