Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

In my initial first piece on the <a href="https://www.smartkarma.com/entities/kioxia" target="_blank" data-smartkarma-citation="entities:29243:1" rel="noopener">Kioxia (6600 JP)</a> IPO on 28 August 2020 called <a href="https://www.smartkarma.com/insights/kioxia-ipo-the-flow-dynamics" target="_blank" data-smartkarma-citation="insights:42648" rel="noopener">Kioxia IPO - The Flow Dynamics</a> I talked about the nature of who was going to be buying (and who was going to be sold to).I also noted my initial reaction that the price might be too high at ¥3,960/share and an EV of close to ¥3.5trln.<blockquote>My initial reaction is that the price may be too high and it could be revised downward. Given the fact that 65% of the offering goes to international investors, who are more inclined to provide their pricing input in a negative way, I think it eminently possible that the offering could be priced lower. I would not be surprised to see an offering price 10-25% lower than the ¥3960 proffered.</blockquote><h3>A New IPO Price Range</h3>On Thursday 17 September it was reported that the Kioxia Holdings IPO Price Range would be set at ¥2800-3500/share making the new offering size top out at ¥334.3bn and the market cap at IPO price be ¥1.88trln - both top figures year-to-date in 2020. That is a drop of 11.6-29.3%, which is a bit more aggressive than I had expected. It means the immediate uplift to Toshiba is considerably smaller compared to their in-price. Since I wrote bearishly on <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> exactly a month ago in <a href="https://www.smartkarma.com/insights/toshiba-topix-inclusion-jack-be-nimble-jack-be-quick" target="_blank" data-smartkarma-citation="insights:42235" rel="noopener">Toshiba TOPIX Inclusion - Jack Be Nimble, Jack Be Quick...</a> the shares are down 13.9%, but only down about 3% since <a href="https://www.smartkarma.com/insights/toshiba-kioxia-ipo-impact-activist-positioning" target="_blank" data-smartkarma-citation="insights:42638" rel="noopener">Toshiba: Kioxia IPO Impact &amp; Activist Positioning</a> on 30 August.If the market reacts not badly to the news of a possibly sharply reduced Kioxia IPO price and the corollary that lower price means lower proceeds (now and in future on a mark-to-market basis) will reduce the payout to Toshiba shareholders in terms of buying back stock could have a negative effect on Toshiba shares. That is worth watching for. It might be worth buying to cover the short. A bit lower down it is worth going long again. More below the fold.

In my initial first piece on the Kioxia (6600 JP) IPO on 28 August 2020 called Kioxia IPO - The Flow Dynamics I talked about the nature of who was going to be buying (and who was going to be sold to).I also noted my initial reaction that the price might be too high at ¥3,960/share and an EV of close to ¥3.5trln.My initial reaction is that the price may be too high and it could be revised downward. Given the fact that 65% of the offering goes to international investors, who are more inclined to provide their pricing input in a negative way, I think it eminently possible that the offering could be priced lower. I would not be surprised to see an offering price 10-25% lower than the ¥3960 proffered.A New IPO Price RangeOn Thursday 17 September it was reported that the Kioxia Holdings IPO Price Range would be set at ¥2800-3500/share making the new offering size top out at ¥334.3bn and the market cap at IPO price be ¥1.88trln - both top figures year-to-date in 2020. That is a drop of 11.6-29.3%, which is a bit more aggressive than I had expected. It means the immediate uplift to Toshiba is considerably smaller compared to their in-price. Since I wrote bearishly on Toshiba Corp (6502 JP) exactly a month ago in Toshiba TOPIX Inclusion - Jack Be Nimble, Jack Be Quick... the shares are down 13.9%, but only down about 3% since Toshiba: Kioxia IPO Impact &amp; Activist Positioning on 30 August.If the market reacts not badly to the news of a possibly sharply reduced Kioxia IPO price and the corollary that lower price means lower proceeds (now and in future on a mark-to-market basis) will reduce the payout to Toshiba shareholders in terms of buying back stock could have a negative effect on Toshiba shares. That is worth watching for. It might be worth buying to cover the short. A bit lower down it is worth going long again. More below the fold. 

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

The Semiconductor Industry Association's monthly statistics update, covering July's semiconductor sales, show revenues that continue to follow the growth trend of the past 25 years.  This Smartkarma Insight uses graphics to show that the market is still in good health despite 2020's challenging circumstances.

The Semiconductor Industry Association's monthly statistics update, covering July's semiconductor sales, show revenues that continue to follow the growth trend of the past 25 years.  This Smartkarma Insight uses graphics to show that the market is still in good health despite 2020's challenging circumstances.

This Smartkarma Insight examines recent spot market price trends for NAND flash and DRAM chips, which are indicators of the health of the semiconductor market as a whole.  These prices suggest that NAND and DRAM prices could fall by 20% in the near term and continue their descent through the end of the year.

This Smartkarma Insight examines recent spot market price trends for NAND flash and DRAM chips, which are indicators of the health of the semiconductor market as a whole.  These prices suggest that NAND and DRAM prices could fall by 20% in the near term and continue their descent through the end of the year.

DRAM & NAND Spot Prices Indicate Impending Fall

The COVID-19 pandemic has caused profound business shifts, resulting in near ruin for some sectors while strengthening others.  This Smartkarma Insight explores this phenomenon and shows how it relates to semiconductors.

The COVID-19 pandemic has caused profound business shifts, resulting in near ruin for some sectors while strengthening others.  This Smartkarma Insight explores this phenomenon and shows how it relates to semiconductors.

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

As Toshiba prepares for a return to TSE1 we examine the history leading to Toshiba’s fall into what probably should have been a delisting, its rescue by a variety of foreign activist funds and subsequent efforts to then rescue its management from the demands of those very funds through a variety of efforts, none of which have quite gotten the share price to the point where those funds would exit.

As Toshiba prepares for a return to TSE1 we examine the history leading to Toshiba’s fall into what probably should have been a delisting, its rescue by a variety of foreign activist funds and subsequent efforts to then rescue its management from the demands of those very funds through a variety of efforts, none of which have quite gotten the share price to the point where those funds would exit.

Japan

Kioxia Holdings Corporation manufactures semiconductor memory products. The Company develops, produces, and sells flash memory cards, solid state drives, secure digital memory cards, and other products. Kioxia Holdings also operates group management strategy formulation and management.

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Kioxia Holdings (285A JP)

Toshiba Is A Range Trade. Still.

In my initial first piece on the $Kioxia My initial reaction is that the price may be too high and it could be revised downward. Given the fact...

Travis Lundy

SIA July Stats Still Show Strength

The Semiconductor Industry Association's

Jim Handy

DRAM & NAND Spot Prices Indicate Impending Fall

This Smartkarma Insight e

Jim Handy

The COVID-19 Pandemic and Semiconductors

The COVID-19 pandemic has caused profound business shifts,

Jim Handy

Toshiba’s Troubled Timeline

As Toshiba prepares for a return to TSE1 we examine the history leading to Toshiba’s fall into what probably should have been a delisting, its...

Mio Kato

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