Softbank Shares Just Exploded After the Company’s CEO Said This

Softbank shares were skyrocketing over 17% in early Thursday trading in Tokyo after CEO Masayoshi Son announced a buyback plan.

The CEO said that Softbank Goup would repurchase 112 million shares worth 600 billion yen (approx $5.46 billion) in the next 11 months. This equates to about 10.3 percent of its total outstanding shares, excluding treasury stock.

The CEO said that the buyback is the largest ever for the company according to Reuters.

“It’s definitely going to … propel the stock, at least in the coming months,” said Andrew Jackson, head of Japanese equities at SooChow CSSD Capital Markets (Asia), to CNBC’s “Squawk Box” on Thursday.

“If you go back to 2016, you look at the last large buyback they did, the 500 billion buyback then, I mean, the stock essentially doubled in the 12 months after that,” Jackson said. “Whether this is unlocking value in the future … is hard to say.”

“This latest buyback changes the equation and puts a floor under SoftBank stock,” Atul Goyal, an analyst at Jefferies Group wrote.

“The share repurchase fits perfectly with the goal of boosting the company’s valuation,” remarked Naoki Fujiwara, chief fund manager at Shinkin Asset Management.

The company reported a 24 percent increase in profit during the quarter. Looking ahead Softbank has also kept its outlook for net income to climb 4.8 percent to 420 billion yen in the fiscal year ending in March.