Japanese telecom major, Softbank recently announced that it will split into two companies. This is an effort to check the downward spiral of Sprint’s stock price, in which Softbank has a controlling stake.
As part of the new structure, the company’s President, Nikesh Arora will oversee its international business, which includes 32% stake in Alibaba Group (BABA) and in Sprint. On the other hand, Softbank’s domestic business in Japan and its stake in Yahoo! would be managed by Ken Miyachi, who serves as Softbank’s President, Chief Operations Officer and Director of Softbank.
Softbank has been trading much below its market value for some time now and this is largely because of its stake in Sprint, which has a huge debt of around $32 billion. While the restructuring is unlikely to change its fortune, it will separate the profitable business from the unprofitable one.
Sprint has been struggling to compete with T-Mobile for some time now. T-Mobile has emerged to become America’s third-largest carrier, replacing Sprint.