In today’s briefing:
- Samsung SDI (006400KS): Controversy on Battery Fire Impacting Reputation and Financial Performance
- Now Is the Time to Seek Ingenuity in Cash Allocation, Not Lament the Decline in Equity Financing
Samsung SDI (006400KS): Controversy on Battery Fire Impacting Reputation and Financial Performance
- Samsung SDI is currently facing legal challenges in the United States stemming from a scooter fire during charging and a separate incident involving a lithium-ion battery fire.
- These incidents are part of a series of recurring battery fire controversies involving Samsung SDI dating back to 2016.
- Notably, the ESG (Environmental, Social, and Governance) risk level for Samsung SDI has been assessed as ‘High,’ supported by an ESG risk score of 2.7.
Now Is the Time to Seek Ingenuity in Cash Allocation, Not Lament the Decline in Equity Financing
- Companies enjoy the benefits of going public, as a larger market capitalization expands their financing and makes it easier to acquire other companies, without capital raising through equity issuance.
- In a market economy, cash returned to shareholders through share buybacks etc is rationally allocated by investing it in companies that need more funds or are worthy of investment.
- Companies should successfully communicate their strategies for expanding corporate value and how to use cash to do so. More such companies will lead to the expansion of Tokyo market.
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