Things Get Worse For Japan Display

Japan Display which had a disastrous IPO last month, falling from the offer price of 900 Yen to 763 Yen by close of trading on the day of the offer, has fallen again to 672 Yen after reporting its first post-IPO financial results.Japan Display was formed from the display-making activities of Sony, Toshiba and Hitachi when they fell on hard times and were rescued by the state-owned Innovation Corporation of Japan (INCJ) which melded them into Japan Display.

Until last month’s IPO, INCJ owned 70% of Japan Display for which it had paid $2 billion in 2012.

At the IPO offer price of 900 Yen, INCJ sold half its stake – 35% of the company – for $1.7 billion, valuing Japan Display at over $4 billion.

About 30% of Japan Display’s sales are to Apple and Apple reported lower than expected sales shortly before the IPO.

Japan Display says that, in March, demand for screens fell and price negotiations with at least one Chinese company were difficult because of lower prices for displays used in medium-range smartphones.

At the IPO, Sony and other investors put 213 million shares up for sale, Japan Display created 140 million new shares to be sold at the IPO, and the INCJ were selling 214 million shares.

The total proceeds of the IPO were nearly $5 billion, made up of the $1.7 billion raised from the sale of the INCJ shareholding, the $1.9 billion raised from the sale of the shares of Sony and other investors, and the $1.26 billion raised by the sale of the 140 million new shares created by Japan Display.

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