Shares of SoftBank Group Corp rose 3% on Tuesday to reach highs last seen during the dot-com bubble, as massive buybacks help shrink the group’s persistent discount.

Shares were priced at 6,100 yen in morning Tokyo trading, hitting levels last seen in early 2000, when speculation on internet stocks saw prices surge before crashing and wiping out most of SoftBank Chief Executive Masayoshi Son’s wealth.

The rebound comes after Son in March pledged to spend up to 2.5 trillion yen ($23 billion) on buybacks, helping lift the stock 130% from March lows.

With around 10 million SoftBank shares being shorted “we are seeing a typical short-squeeze,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Other tailwinds for the company include progress in monetizing core assets such as e-commerce firm Alibaba Group Holding to raise $41 billion to fund the buybacks and stabilise its balance sheet. The plan has caused jitters at credit-rating firms.

Alibaba’s stock price continues to appreciate, with a portfolio company backed by SoftBank’s $100 billion Vision Fund - insurance startup Lemonade Inc - successfully listing in New York last week.

Vision Fund reported an operating shortfall of 1.9 trillion yen for the year ended March as its portfolio floundered, pulling the broader group to a record annual loss.

Citigroup sees the fund booking valuation gains of 600 billion yen in the April-June quarter, analyst Mitsunobu Tsuruo wrote in a note last week, “with significant scope for a rebound in the valuations of non-listed firms” in the portfolio.

SoftBank provides little detail on how it revalues its investments. The ongoing impact of the coronavirus outbreak, which has exposed underlying problems at portfolio companies, means the fund’s outlook for the rest of the financial year “remains grim”, Tsuruo wrote.

($1 = 107.3200 yen)

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