Japan Display shares plunge on Tokyo debut
By Hiroshi Hiyama, AFP
March 20, 2014, 12:05 am TWN
TOKYO--Shares in Japan Display — the world's biggest maker of screens for smartphones and tablets and a key Apple supplier — plunged on their Tokyo debut Wednesday, following a US$3.2 billion initial public offering.
The stock, which at one stage lost more than a fifth of its value, ended at 763 yen, a 15.2 percent drop from its 900 yen listing price, with one analyst describing the losses as a “disaster.”
The benchmark Nikkei stock index finished 0.36 percent higher.
The liquid crystal display maker last week priced its initial public offering at the low end of expectations, suggesting that investors were wary about the sale, but insisted that demand was strong.
Japan Display holds a leading 16 percent in the growing US$35 billion global market for smartphone and tablet screens, according to US-based research firm NPD Group.
And its IPO was one of the biggest in Tokyo since drinks giant Suntory's food-and-beverage unit raised US$3.9 billion in 2013.
However, analysts have warned it faces tough competition from lower-cost countries, including China, South Korea and Taiwan. To address this, the firm — set up in 2012 through the merger of Hitachi, Toshiba and Sony's loss-making LCD units — is looking to boost production of small and medium-sized screens.
But Seiichi Suzuki, market analyst at Tokai Tokyo Securities, told AFP: “This is a company that was made up of units offloaded by their parent firms. (It doesn't) have a bright future.”
He said the firm should not have “forced its listing,” citing a tough market environment with the Nikkei index down around 10 percent this year.
Japan Display had earlier said it would sell 140 million new shares at between 900 yen and 1,100 yen, while its major private shareholders would offload 213.9 million shares.
“A disaster, no doubt,” Lorne Steinberg, head of Montreal-based Lorne Steinberg Wealth Management, told Dow Jones Newswires.