[Global Technology Correspondent, Wang Huan] According to a report by Japan's Kyodo News Agency on August 1, Toshiba, currently undergoing business restructuring, was demoted from the main board of the Tokyo Stock Exchange to the second board market on the same day. This downgrade stems from Toshiba's massive losses in its U.S. nuclear power business, which ultimately led to insolvency by the end of March. As a result, it failed to meet the listing standards set by the Tokyo Stock Exchange. This move reflects the current dire state of Toshiba.
If the insolvency issue isn't resolved before the end of March next year, Toshiba's shares will face automatic delisting. With the key deal involving the sale of its semiconductor subsidiary still unresolved, the future looks uncertain.
Attached is a data map illustrating the situation.
Following Sharp's example last year, this marks another major electronics giant being demoted to the second board market. On July 31st, Toshiba's final trading day on the main board saw the stock price remain relatively stable throughout the session, but there were signs of short-term speculative buying near the close. The closing price per share was 6.80 yen higher than the previous Friday, reaching 246.00 yen (approximately RMB 15), marking a 2.8% increase.
Toshiba was once one of the most prominent stocks on the main board of the Tokyo Stock Exchange, ranking among the top ten market capitalizations outside of financial institutions during the economic bubble era. At that time, the stock price exceeded 1,000 yen. However, following the exposure of accounting fraud in 2015, the stock price plummeted significantly. Although it rebounded slightly in 2016, the subsequent massive loss in its U.S. nuclear power business caused the stock price to crash again.
To bid farewell to insolvency, Toshiba aims to sell its semiconductor subsidiary for over 2 trillion yen. Currently, it is in priority negotiations with Japan’s government-led "Japan-US-Korea Consortium." However, no formal contract has been signed yet. The joint venture partner, Western Digital Corporation (WD), has opposed the sale of the semiconductor subsidiary to external entities and continues to file lawsuits in court.
The deadline for submitting Toshiba's audited "Fiscal 2016 Financial Report," which has been postponed until August 10, is fast approaching. If the auditing firm issues an "inappropriate" opinion, the Tokyo Stock Exchange Group may decide to delist Toshiba. Even if the company manages to stay listed, it might not be able to return to the main board market within the next five years due to the Tokyo Stock Exchange's requirement for continuous proper settlement.
As Toshiba grapples with these challenges, investors and stakeholders anxiously await further developments. The company's future remains uncertain, as both internal restructuring efforts and external legal battles continue to unfold.
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