Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Square Enix holds globally recognized IP with monetization upside across platforms, and recent pipeline discipline signals a shift toward higher-margin, high-quality titles that can stabilize earnings and restore growth.</li>
<li>Activist involvement is intensifying, creating strong pressure for capital returns, governance reform, and strategic clarity - unlocking shareholder value in a business that remains structurally underleveraged and undervalued vs peers.</li>
<li>With operating margins improving, digital sales accelerating, and cost structures being realigned, Square Enix is positioned to re-rate meaningfully as investor confidence rebuilds and management delivers on core turnaround objectives.</li>
</ul>


Square Enix holds globally recognized IP with monetization upside across platforms, and recent pipeline discipline signals a shift toward higher-margin, high-quality titles that can stabilize earnings and restore growth.
Activist involvement is intensifying, creating strong pressure for capital returns, governance reform, and strategic clarity - unlocking shareholder value in a business that remains structurally underleveraged and undervalued vs peers.
With operating margins improving, digital sales accelerating, and cost structures being realigned, Square Enix is positioned to re-rate meaningfully as investor confidence rebuilds and management delivers on core turnaround objectives.


Square Enix (9684) | Turnaround in Motion

<ul>
<li>Activist investors 3D Investment Partners and Dalton Investments have both taken meaningful stakes in Square Enix - highlights capital inefficiency and poor margin profile</li>
<li>Daito Trust sits on over ¥100bn in net cash, an arguably excessive cushion for a mature operator with steady cash flows. Silchester have taken note</li>
<li>Iriso Electronic and INES both trade below book value. Attractive value plays for small cap funds.</li>
</ul>


Activist investors 3D Investment Partners and Dalton Investments have both taken meaningful stakes in Square Enix - highlights capital inefficiency and poor margin profile
Daito Trust sits on over ¥100bn in net cash, an arguably excessive cushion for a mature operator with steady cash flows. Silchester have taken note
Iriso Electronic and INES both trade below book value. Attractive value plays for small cap funds.


Japan Activist Watch | Square Enix, DaitoTrust, Iriso & INES

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>There are 15 stocks in Japan that will be sold by passive trackers at the close on 31 May.</li>
<li>Short interest has been increasing in these stocks over the last few months and there will be covering on implementation date.</li>
<li>Cumulative excess volume on all stocks has risen in the last couple of months though the pace of the increase has varied.</li>
</ul>


There are 15 stocks in Japan that will be sold by passive trackers at the close on 31 May.
Short interest has been increasing in these stocks over the last few months and there will be covering on implementation date.
Cumulative excess volume on all stocks has risen in the last couple of months though the pace of the increase has varied.


Japan - Another Big Round of Passive Selling

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

<ul>
<li>On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  </li>
<li>The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.</li>
<li><em><strong>A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024. </strong></em></li>
</ul>


On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  
The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.
A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024. 


Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Last week, "Murakami Group" (a group of investors who jointly file large shareholder filings) announced a 5+% stake in <a href="https://www.smartkarma.com/entities/dena-co-ltd" target="_blank" data-smartkarma-citation="entities:747:1" rel="noopener">DeNA (2432 JP)</a>. The stock popped. Then they filed again.</li>
<li>This was not surprising. It has long been known as a "value" name (and has the requisite short balance to prove it). The question is how much value IS there</li>
<li>The question is how much value IS there. And to whom? It's an interesting question which deserves a look, so we take a look.  </li>
</ul>


Last week, "Murakami Group" (a group of investors who jointly file large shareholder filings) announced a 5+% stake in DeNA (2432 JP). The stock popped. Then they filed again.
This was not surprising. It has long been known as a "value" name (and has the requisite short balance to prove it). The question is how much value IS there
The question is how much value IS there. And to whom? It's an interesting question which deserves a look, so we take a look.  


[Japan Activism] DeNA Attracts Murakami Group - Potentially Squeezable With Reason

Japan

SQUARE ENIX HOLDINGS CO., LTD. develops and sells entertainment software for home video game consoles including Dragon Quest and Final Fantasy series. The Company also publishes books such as informational guide books for its game software, and comic magazines and books.  Additionally, Square Enix sells character goods and stationery items from its software products.

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Square Enix Holdings (9684 JP)

Square Enix (9684) | Turnaround in Motion

Square Enix's focus on high-quality titles and improved financials could lead to a re-rating of the company's stock as investor confidence grows...

Mark Chadwick

Japan Activist Watch | Square Enix, DaitoTrust, Iriso & INES

Activist investors target Square Enix for capital inefficiency, Daito Trust criticized for excessive cash reserves, Iriso Electronic and INES...

Mark Chadwick

Japan - Another Big Round of Passive Selling

The close tomorrow should see huge volumes trade on these stocks. Shorts will be covered and longs will be selectively put on.

Brian Freitas

Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

Shift Up announced that it will be postponing its IPO to July. A major investment positive is the enormous initial success of Stellar Blade which...

Douglas Kim

[Japan Activism] DeNA Attracts Murakami Group - Potentially Squeezable With Reason

Activist Murakami-san has bought a position in heavily-shorted and perpetually under-levered (and cheap) DeNA. The company has not covered itself...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Square Enix (9684) | Turnaround in Motion

​Square Enix's focus on high-quality titles and improved financials could lead to a re-rating of the company's stock as investor confidence grows...

Mark Chadwick

Japan Activist Watch | Square Enix, DaitoTrust, Iriso & INES

​Activist investors target Square Enix for capital inefficiency, Daito Trust criticized for excessive cash reserves, Iriso Electronic and INES...

Mark Chadwick

Japan - Another Big Round of Passive Selling

The close tomorrow should see huge volumes trade on these stocks. Shorts will be covered and longs will be selectively put on.

Brian Freitas

Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

Shift Up announced that it will be postponing its IPO to July. A major investment positive is the enormous initial success of Stellar Blade which...

Douglas Kim

[Japan Activism] DeNA Attracts Murakami Group - Potentially Squeezable With Reason

Activist Murakami-san has bought a position in heavily-shorted and perpetually under-levered (and cheap) DeNA. The company has not covered itself...

Travis Lundy

Square Enix's focus on high-quality titles and improved financials could lead to a re-rating of the company's stock as investor confidence grows...

Activist investors target Square Enix for capital inefficiency, Daito Trust criticized for excessive cash reserves, Iriso Electronic and INES...