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Sharp shares plunge after takeover thrown into question

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Do you want to know why so many U.S. companies are bought by foreign companies..... clear and true transparency. Not something you often find in an older Japanese company.

1 ( +1 / -0 )

I really don't know if he is overpaying. Sharp has a really good reputation. If the company were taken over, and the new products were great, the investment would really pay off. If the new products were junk, that would be the end of the company.

Farmboy, it's not exactly certain how Hon Hai is going to turn around a huge money bleeding operation like Sharp. They probably have to start cutting jobs in Japan, just suck in all the technology, then move the meat of the production off shore to China where Hon Hai (Foxconn) has their facilities. What's left in Japan will probably be just R&D.

Barrons reports that Hon Hai is overpaying by roughly 50% over value, and that Sharp's LCD business is almost worthless because it's a huge money loser.

http://blogs.barrons.com/asiastocks/2016/02/17/is-hon-hai-overpaying-sharp-bernstein-sees-30-downside/

The answer is very simple. If Hon Hai insists on buying Sharp, Sharp should cut the price to $3 billion (instead of originally agreed price of $6 billion) to cover for the $3 billion worth of hidden liabilities that Sharp didn't declare.

-1 ( +1 / -2 )

Hideki Yasuda, an analyst at the Ace Research Institute in Tokyo, said the deal would likely still go ahead, adding that Japanese accounting rules did not require Sharp to disclose the reported liabilities.

Lol if I was Hon Hai, that statement would be enough to put a hold on everything. Well, that's where they are right now.

@ B.I Sharma

Giant Japanese financial institutions should have provided liberal assistance to Sharp to enable it to make a turnaround in its business operations and finally come out of the red ,instead of allowing it to be taken over by a foreign company Foxconn.

Well, if you read the article, Foxconn or any other foreign company might decide not to take it after all. Apparently, even Japanese financial institutions didn't want to bail out a company for shady accounting practices, which is the real issue here. As Sharp's value is decreasing, and investigations are going on, maybe they can tell their true value. Maybe then Foxconn can reconsider.

1 ( +1 / -0 )

Japan simply doesn't have clout to support Sharp, Panasonic, Toshiba, Sony, NEC, Hitachi, etc etc etc.

I agree. Japan should just limit itself to just two companies so that they can focus their business against international companies. More companies equal spreading thin of intellectual resources.

0 ( +1 / -1 )

Japan simply doesn't have clout to support Sharp, >Panasonic, Toshiba, Sony, NEC, Hitachi, etc etc etc.

It takes the whole world. These companies were highly successful for decades. Then LG and Samsung came along and wowed and dazzled the world.

I used to buy all Japanese electronics, mostly Panasonics and Sonys, but Korean brands are starting to appear in my house.

1 ( +1 / -0 )

Giant Japanese financial institutions should have provided liberal assistance to Sharp to enable it to make a turnaround in its business operations and finally come out of the red ,instead of allowing it to be taken over by a foreign company Foxconn.

1 ( +1 / -0 )

I really don't know if he is overpaying. Sharp has a really good reputation. If the company were taken over, and the new products were great, the investment would really pay off. If the new products were junk, that would be the end of the company. He's paying for the reputation, among other things, but the reputation can be lost easily

1 ( +1 / -0 )

However, Bloomberg News, citing people familiar with the matter, said it involved potential liabilities topping 300 billion yen ($2.7 billion) that Hon Hai would have to assume in a takeover.

LOL.. I told you yesterday imaginative Japanese accounting practices will make sure this would happen.

Despite its bleeding balance sheet, the company is still a leader in LCD technology

LOL, unfortunately the world is rapidly moving onto better technology. LCD is old tech. Hon Hai is overpaying for old tech.

-1 ( +1 / -2 )

Glad they are being cautious... Take your time to look under the carpet because we all know how well Olympus and Toshiba cooked the books.

4 ( +5 / -1 )

“There is no obligation under Japanese accounting rules to disclose contingent liabilities,”

And THAT is precisely one of the reasons why you have to take care in dealing with a Japanese company, and why this won't hurt the Taiwanese company one bit if they ultimately reject the deal.

I've always liked Sharp and it's products, for the most part, and still use a few, but the way companies are run (down) and how the government tries to protect and promote them with outdated means leaves me with zero sympathy for where it's ended up.

11 ( +11 / -0 )

Its sad, but maybe thinning the heard isn't the worst thing. Korea has only two electronics companies that are giving the world a run. LG and Samsung. Japan simply doesn't have clout to support Sharp, Panasonic, Toshiba, Sony, NEC, Hitachi, etc etc etc.

2 ( +3 / -1 )

Have to agree with "cracaphat" public-private Innovation Network Corporation of Japan (INCJ), must have known all about the debts, but still was willing to rescue Sharp, that meant the government was willing to load more debt on to the taxpayers, at any cost. Will we ever know the truth, nah!! don't think so, transparency is something all governments know little about.

6 ( +7 / -1 )

You have to be careful if your want to buy J-companies accounting is often like a giant BLACK HOLE, it cant be very difficult to determine where a company sits financially, here its often as clear as mud!! Sounds like Hon Hai found some of that mud!

9 ( +9 / -0 )

No great loss if Hon Hai pass up on this deal. Probably another financial scandal brewing like Olympus, and who knows which other J Corp.

6 ( +6 / -0 )

Parties involved refused to comment, what is left for JT posters to say? conspiracy theories.

2 ( +3 / -1 )

Oh!Oh! Why would the cynic in me think this new info came from the govt or an entity tied to them in order to try and sabotage the takeover falling into Chi..,er,I mean Taiwanese hands?

5 ( +6 / -1 )

Yet another Japanese electronics corporation goes down the pooper! Are you paying attention Abe-san? These are the same corporations you backed to rebuild the economy with your BS Abenomics plan. The international markets for electronics, vehicles and mass-produced products no longer belong to Japan and cannot sustain economic growth in the international markets. Japan needs innovation to recover, but it's unlikely to come from economic strategies based on the boom years of the 80's. Japan only has one resource, its workforce and they are being screwed by failed economic policies and wasteful economic ideals. Instead of trying to compete in global markets that no longer exist, Japan should be trying to shrink its economy to match the shrinking population and focus on the domestic markets for Japan made goods to keep the money in the country and attempt to pay back the huge public debt, which money the government owes its sheeple.

6 ( +9 / -3 )

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