In today’s briefing:
- Nidec (6594): Fake Resignations Don’t Count
- What Are Companies that Re-Sell Treasury Stock Thinking?
Nidec (6594): Fake Resignations Don’t Count
- Shigenobu Nagamori resigned as director but remains honorary chairman, a move we see as insufficient to address Nidec’s recent accounting controversy.
- Meaningful recovery requires both founders’ full retirement, a restructured, more independent board, and a chief risk officer to oversee professional auditing and reforms.
- The company also needs to improve transparency on assets, overhaul incentives toward return on investment, and develop a realistic mid-term plan to improve return on capital.
What Are Companies that Re-Sell Treasury Stock Thinking?
- Given the current high stock prices relative to EPS compared to the past, attention should be paid to whether overseas investors shift to net selling if prices begin to decline.
- In cases where treasury stock is sold again, it raises questions: Was it necessary to repurchase treasury stock amid cash flow concerns, or was this a forward-looking cash allocation decision?
- As cash utilization, balance sheet restructuring, and capital profitability improvements gain attention, the number of outstanding shares will gradually decline as prompt share buybacks increase.
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