Most bosses dread Elliott Management, an American activist hedge fund whose tactics the traumatized chairman of a German company once described as “psycho-terror.”

After news leaked on Feb. 6 that Elliott had taken a 3% stake, worth more than $2.5 billion, in SoftBank Group, a Japanese telecoms-and-tech conglomerate, its flamboyant founder, Masayoshi Son, seemed less perturbed. As he presented SoftBank’s results last week, Son professed to be “thankful that such a distinguished investor has joined us as a friend.”

He has reason to sound welcoming. SoftBank’s languishing share price leapt by 7% on the news of Elliott’s stake.

Elliott’s main focus at SoftBank is the Vision Fund, Son’s $99 billion tech-investment arm.

Although SoftBank’s stake in the fund amounts to only 13% or so of the group’s total gross assets, the vehicle is causing a crisis of confidence. Last year its handling of WeWork led to the scuttling of the loss-making property firm’s listing, followed by a costly bailout. That is when Elliott began to build its stake in earnest.

SoftBank’s earnings also disappointed. Overall the group eked out only $24 million of operating profit.

The Vision Fund lost $2 billion in the last quarter, better than the $8.9 billion loss in the previous three months but far worse than the market was expecting.

Last week, one Vision Fund investment, an e-commerce startup from San Francisco called Brandless that received around $100 million from Son two years ago, became the first in the portfolio to fold. (Brandless had based its merchandising, customer service and other operations in Minneapolis.)

A rare bit of good news emerged recently when a U.S. judge approved the $26 billion takeover of Sprint, a mobile operator majority-owned by SoftBank, by T-Mobile, a competitor. The merger would allow SoftBank to shed about $40 billion of Sprint debt. SoftBank’s shares gained 12% the next day, though reports later surfaced that T-Mobile might want to renegotiate the deal.

Even that leaves the firm’s market value, at 11 trillion yen ($104 billion), well below what its assets would imply.

It owns $270 billion worth of stakes in big listed companies (Alibaba, Sprint and its Japanese telecoms firm) and unlisted firms like Arm, a British chip-design firm. SoftBank is trading at a discount to fair value of around 60% after accounting for debt.

To close the gap, Elliott’s boss Paul Singer is urging the firm to buy back as much as $20 billion of its shares — and to improve its corporate governance.

A buyback is likely after the Sprint deal is complete, said Chris Lane of Bernstein, a broker. SoftBank will probably add independent directors at its shareholder meeting in June; it currently has two.

Son may refrain from deploying a second, $108 billion Vision Fund, after it became clear that the original’s troubles put off big institutional investors. SoftBank could instead use a small bridge fund to carry on investing, Son said last Wednesday.

Elliott wants SoftBank to create a new board committee to guide Vision Fund investments, which Son has sometimes directed with little regard to opposition from colleagues. Singer could agitate for the fund to be reduced in size over time.

If SoftBank’s shares keep gaining in value, Elliott might simply cash in and exit. That would be easier than forcing the strong-willed Son, who owns roughly a quarter of SoftBank, to reform. But Singer is unlikely to depart without trying some of his signature psychological warfare.