Sharp Corp’s 42 percent increase in its shares since the beginning of the year has left hedge funds that have placed wagers on a decline in the stock of the Japanese consumer electronics maker in the midst of a bailout smarting.
Osaka-based Sharp is the most-shorted stock by the number of shares after Toshiba Corp, according to filings with the Japan Exchange Group. Shares of Sharp gained 28 percent in the last two trading days of last week in Tokyo to ¥176, reaching the highest level since Aug. 31 last year. That may spell losses for hedge funds including Lansdowne Partners LLP and Egerton Capital (UK) LLP, which have disclosed bearish bets on the stock since November last year.
Sharp shares, which declined 53 percent last year, have pared losses since the beginning of the year when the company started negotiating with rival bidders Hon Hai Precision Industry Co (鴻海) — which is known as Foxconn Technology Group (富士康) outside Taiwan — and state-backed Innovation Network Corp of Japan. About 134.96 million of Sharp’s shares are being shorted, which is equivalent to about 8 percent of its total outstanding stocks, according to filings to Japan Exchange Group.
The stock gained 0.6 percent to ¥177 yen at the close in Tokyo yesterday, while the benchmark TOPIX rose 0.84 percent to 1,380.41.
Tokyo stocks cast off early losses to finish higher yesterday, buoyed by a weaker yen and upbeat economic data, The Nikkei 225 index finished 1.1 percent higher at 17,004.30.
Lansdowne disclosed its bearish bets on the stock on Jan. 20, while Egerton revealed its short-selling positions on Sharp on Nov. 27, according to filings with the Japan Exchange Group.
TERRY GOU
Hon Hai chairman Terry Gou (郭台銘) is stepping up pressure on Sharp to quickly accept his proposed bailout after the chief executive officer of the Japanese company said last week he planned to take another month to choose between the two competing offers.
Gou has pushed hard for a deal even as it looked unlikely he would win. Sharp had been inclined to take the bid from government-backed Innovation Network, which offered about ¥300 billion (US$2.6 billion), people familiar with the matter said last month. Gou then raised his bid from ¥600 billion to about ¥660 billion and flew to Japan to make a personal appeal to Sharp’s board, its banks and government officials, a person familiar with the matter has said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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