Sharp has abandoned its plans to launch a public offering to raise $1.8 billion in funds, a week after making an official announcement on June 22nd, according to Nikkei.
The report goes on to say that parent company Foxconn — which is said to be “furious”, according to Nikkei sources — was probably behind the decision to scrap the fundraising effort, following a larger-than-expected drop in Sharp’s stock prices.
The company blamed this on “instability of the stock market” brought on by the trade war between the US and China. Investors are also said to have had concerns over dilution of earnings per share resulting from the new stock issuance.
Share prices apparently dropped 21% between June 4th and 28th. Following the cancellation, prices increased 15% to settle back on ¥2,700 by the 29th.
Analyst Comment
Hmmm, I wonder how Terry Gou now feels about the actions of his apparent friend, Donald Trump! (BR)
