Photo Illustration: Sarah Grillo/Axios. Photo: David A. Grogan/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images

Activist investor Elliott Management has acquired around a $2.5 billion stake in SoftBank Group, saying the market "significantly undervalues" the Japanese group's assets.

The state of play: So far the relationship appears to be friendly, but Elliott isn't shy about getting into the mud if that's where it feels the most profit lies.

  • Singer vs. Son would be the investment world's version of Ali-Frazier.

Why it matters: Sources say that Elliott wants SoftBank to buy back around $20 billion worth of its stock, believing it trades at around a 60% discount to net asset value.

  • This puts pressure on SoftBank to partially liquidate its larger holdings, such as its 25% stake in Alibaba Group.
  • It also could slow Vision Fund 2 investments until SoftBank holds at least a first close on third-party commitments (or has enough Vision Fund 1 proceeds to recycle). In short, Elliott would prefer SoftBank spend its balance sheet cash on stock buybacks, not on private company investments.

What Elliott is saying: "Elliott has engaged privately with SoftBank’s leadership and is working constructively on solutions to help SoftBank materially and sustainably reduce its discount to intrinsic value."

What SoftBank is saying: "SoftBank always maintains constructive discussions with shareholders regarding their views on the Company and we are in complete agreement that our shares are deeply undervalued by public investors. SoftBank welcomes feedback from fellow shareholders."

  • This is the largest investment Elliott has ever made in a Japanese company.
  • Elliott bought at a particularly tricky moment for SoftBank. Not only because of questions surrounding Vision Fund 2, but also because its planned Sprint sale rests in the hands of a U.S. court.
  • SoftBank's market cap rose from around $89 billion to $95 billion on the news.

The big question is how an activist hedge fund, which thinks in months and years, deals with a company that claims to think in centuries.

Go deeper:

Go deeper

Supreme Court won't block Rhode Island's eased absentee voting rules

Photo: Robert Nickelsberg/Getty Images

The Supreme Court said Thursday that it will not block Rhode Island's move to ease its requirements for absentee voting during November's election.

Why it matters: The decision is a loss for Republicans, who had requested an emergency order as the state is expected to begin mailing out its ballots.

Breaking down Uber and Lyft's threat to suspend services in California

Illustration: Lazaro Gamio/Axios

Uber and Lyft are ratcheting up the fight with California’s state government over the classification of drivers with a move that would deprive Californians of their ride-hailing services (and halt driver income).

Driving the news: On Wednesday, both companies said that if a court doesn’t overturn or further pause a new ruling forcing them to reclassify California drivers as employees, they’ll suspend their services in the state until November’s election, when voters could potentially exempt them by passing a ballot measure.

Trump announces normalization of ties between Israel and UAE

Israel Prime Minister Netanyahu, Trump and UAE Crown Prince Mohammed bin Zayed. Photo: Artur Widak/NurPhoto; Samuel Corum; Odd Andersen/AFP via Getty Images

President Trump announced a "historic" deal Thursday which will see Israel and the UAE open full diplomatic relations and Israel suspend its annexation plans in the West Bank.

Why it matters: This is a major breakthrough for Israel, which lacks diplomatic recognition in many Middle Eastern countries but has been steadily improving relations in the Gulf, largely due to mutual antipathy toward Iran.