Toshiba shares plunge 40% over three days
Market shocked by further losses tied to US nuclear business
TOKYO -- Toshiba shares suffered a double-digit percentage loss for a third day in a row, after the company warned Tuesday of a massive write-down on a U.S. nuclear plant subsidiary.
Shares in the Japanese industrial giant fell nearly 17% to close at 258.7 yen on Thursday, making for three-day decline of slightly more than 40%. The stock price dropped as much as 26% in heavy trading during the session, sinking to 232 yen for the first time in roughly seven months.
The Tokyo-based company's market capitalization shrank by nearly 800 billion yen ($6.86 billion) over three sessions, tumbling below 1 trillion yen at one point on Thursday.
The potential impairment loss that has roiled the market hangs over a U.S. nuclear plant construction business acquired in late 2015. Costs have outgrown expectations, and Toshiba on Tuesday announced the possibility of a multi-billion dollar write-down.
With the exact size of charge still uncertain, investors have moved to sell. And they are "unable to shake off the suspicion there may be the risk of other losses," said Mitsushige Akino of Ichiyoshi Asset Management.
Toshiba had previously booked a roughly 250 billion yen impairment loss in its nuclear business in the fiscal year ended March 2016, owing mostly to the U.S. unit. The latest revelation came as a shock, as investors believed Toshiba had already lanced that boil. Also worrying market players was Wednesday's downgrades of the company by foreign and domestic rating agencies.
Trading in Toshiba reached 638.7 million shares on Thursday, accounting for 30% of volume on the Tokyo Stock Exchange's first section. This surpassed the 400 million shares traded on May 12, 2015, when an accounting scandal surfaced at the company. Toshiba's trading value of 165.3 billion yen was the highest of any stock, more than double that of second-place Toyota Motor.
Prior to Tuesday's announcement, Toshiba stock been on an upswing. he share price on Dec. 15 was triple a low plumbed in February.