With a $7.6 billion gain from T-Mobile, SoftBank’s shares jump

On Wednesday, SoftBank Group’s stock increased by 5% following the company’s announcement that it will receive shares in the U.S. carrier T-Mobile valued at around $7.59 billion at no extra cost.

The conglomerate led by Masayoshi Son announced late on Tuesday that it had instructed T-Mobile U.S. to issue 48.75 million shares of common stock to it following the fulfillment of requirements outlined in an agreement reached as part of the combination of T-Mobile and Sprint, the U.S. telecom owned by SoftBank.

With the successful listing of chip manufacturer Arm in September, SoftBank’s portfolio of listed assets is strengthened by this purchase, which doubles its T-Mobile U.S. share to 7.64% from its present 3.75%.

In a client note, Macquarie analyst Paul Golding stated, «This increases the proportion of listed, measurable equity in hand on (SoftBank Group’s) balance sheet, and, even better, proportions of marginable equity relative to indebtedness.»

SoftBank’s stock was poised to see its largest increase in over a month. The benchmark index has increased by about 30% year to date, whereas the conglomerate has only increased by about 14%. Based on estimations by Macquarie, the group trades at a 45.5% discount to the value of its assets.

Son has been one of the top investors in late-stage companies, but he has seen a number of setbacks, such as the bankruptcy of WeWork, the office-sharing company that was once the most valued startup in the United States.

SoftBank’s internal rate of return on its Sprint investment increases to 25.5% as a result of the T-Mobile U.S. acquisition.