Rakuten Bank shares plunge in Tokyo after parent company plans to split shares
Shares in Rakuten Bank plunged Thursday morning after parent company Rakuten Group announced plans to reduce its stake in the lender.
Rakuten Bank stock 5838,
It recently fell 8.4% to 2,508 yen. Stocks are experiencing their biggest one-day decline since September 27, according to FactSet.
Rakuten Group 4755,
At the opening of the Tokyo stock market on Thursday, the bank announced that it plans to offer 24.55 million shares of Rakuten Bank stock at 2,470 yen per share through an overseas secondary offering. This is a 9.8% discount from Wednesday’s closing price of 2,738 yen.
The total value of this offering is approximately 60.64 billion yuan ($411.68 million).
It was announced that Rakuten Group’s stake in Rakuten Bank will decrease from 63.34% to 49.27% after the public offering.
The Japanese tech giant is selling assets as its free cash flow remains negative and it needs to repay or refinance nearly 1 trillion yen worth of debt over the next two years, Citi Research analyst Mitsunobu Tsuruo said in a report.
A successful overseas sale of Rakuten Bank shares would provide some support, but problems would remain, he said, without specifying details.
