In today’s briefing:
- Daiho Corp (1822) A GIANT Transaction Which Is Not What It Looks Like. Smells Bad.
- Toshiba (6502 JP): National Security Overrides the Interests of Speculators
- Appier (4180 JP) – Eating the Cookie Crumbs
- Japan’s Governance: About the Article on Activist
Daiho Corp (1822) A GIANT Transaction Which Is Not What It Looks Like. Smells Bad.
- Daiho Corp (1822 JP) has announced a deal which is not quite what it looks like.
- And despite a buyback of more than 50% of shares outstanding, and an “accretive” sale to another party at a higher price, it is a governance disaster.
- And existing shareholders have an out, but it is complicated. If you own the stock, or you look at risk arb, or activism, this may be worth a read.
Toshiba (6502 JP): National Security Overrides the Interests of Speculators
- Toshiba possesses technologies of vital importance to Japan’s economic competitiveness and national security: nuclear power, quantum cryptography and discrete semiconductors.
- Any changes in ownership or management that would undermine or leak these technologies would probably not be tolerated.
- LightStream’s Mio Kato writes that Toshiba itself is attractive but the drama surrounding it is decidedly looking bad for business. He remains negative on the stock.
Appier (4180 JP) – Eating the Cookie Crumbs
- The stock is down 54% over the past year despite 41% revenue growth. We see 3 key drivers in 2022.
- Appier is growing rapidly in the US, a much bigger market than its home market of North Asia.
- Appier is at the forefront of digital transformation, benefitting from structural DX of marketing functions and increased use of 1st party data.
Japan’s Governance: About the Article on Activist
- This article will discuss points with reference to the March 16 Nikkei article and focused on the corporate governance practices of companies in which activists have recently raised their shareholdings.
- It isn’t reasonable to link the investment activity of activists to the number of M&As, nor is it reasonable to discuss their performance over a short period in their mandate.
- Looking at the corporate governance status of the portfolio companies, excluding Monex Group, which generally responds well to many of the criteria, these companies are facing some challenges.
Before it’s here, it’s on Smartkarma
