Shares of Rakuten have gained nearly 7.9 percent year-to-date despite being down about 20 percent last year.
Shares of Rakuten Group Inc (Tokyo: 4745) closed trading Monday at 643 yen, down 9.05 percent from today’s opening price. The sudden drop in Rakuten shares was attributed to advertisement By Reuters that the company is in the final stages of issuing new shares in an effort to raise about $2.2 billion. According to the media, Rakuten plans to issue shares to founder and CEO Hiroshi Mikitani and a fund controlled by the businessman.
However, the company issued a press release rebutting the announcement. According to Rakuten, although the company plans to raise capital, there has been no official announcement to justify the rumors.
While the company has been considering various financial strategies including what was reported in news reports, no decisions have been made at this time. If a decision is reached on a matter that requires disclosure, we will do so in a timely and appropriate manner,” the company said male In a press release.
People familiar with the matter have reportedly confirmed that the company intends to pay down debt and build base stations for its $2.2 billion mobile business.
Rakuten’s latest funding report comes after KKR, a leading global investment firm, increased its stake in Seiyu from 65% to 85%.
Hiro Hirano, Co-Head of Private Equity Division of KKR Asia Pacific and CEO of KKR Japan, said:
“We are pleased to deepen our relationship with Seiyu, an iconic Japanese brand in which we continue to see strong promise. We look forward to unlocking the company’s full potential through the continued strategic partnership with Rakuten and Walmart…”
Rakuten Market Outlook
The Japanese tech giant announced its first-quarter financial results on May 12. According to the announcement, the Rakuten Group reported revenue of 475,635 million Japanese yen, an increase of 9.3 percent year-on-year, during the first three months of the year ending March 31, 2023. During the first quarter, the company issued nearly 2 million ordinary shares, which led to a weakening of the stock market. Currently, Rakuten has about 1.59 billion shares outstanding.
However, the latest stock data shows that Rakuten shares have gained nearly 7.9 percent since the start of the year despite being down about 20 percent last year. Having been rated 16 times, Rakuten shares have received an average Hold rating, according to a survey by MarketWatch.
However, the company has worked to diversify its business and expand its market reach. Among its subsidiaries – including Internet Services, FinTech and Mobile – the company has significantly consolidated to ensure its future growth prospects.
Moreover, a report by REFINITIV showed that Rakuten posted a net loss of around 735 billion yen in just over four years.
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