SHARE

Japan's Sharp has scrapped its plans to issue $1.8bn in new shares, just weeks after its share price began to plummet as a result of the announcement.

Its share price fell as much as 21 per cent since the announcement on June 5th, over investor fears that the deal would dilute earnings per share by about 20 per cent.

As the decision to ditch the issuance was announced late last night, Sharp's share price rose 17 per cent by early afternoon. It closed the market at an increase of 15 per cent.

Read more: Japan's Sharp is buying Toshiba's PC unit, but its share price is falling

The company said in a statement that the decision to cancel was made over fears of the impending impact of trade friction between the US and China.

Analysts however have disagreed, arguing that it was instead the June 5th announcement's resulting share price erosion that caused the about-face.

Until markets opened in Japan this morning, the broader Tokyo stock market had only fallen by 1 per cent over the same period.

The company added that it will continue discussions with banks on the dissolution of the preferred shares moving forward.

Original Article

LEAVE A REPLY

Please enter your comment!
Please enter your name here