By Sam Nussey
TOKYO (Reuters) – Shares in Kokusai Electric fell 9% in early Tokyo trading on Wednesday, a day after Reuters reported private equity firm KKR plans to cut its stake in the Japanese chip equipment manufacturer.
KKR plans to sell roughly half of its 43% stake in Kokusai to investors, Reuters reported late on Tuesday, cashing in after a blistering run for its shares, with the chip tool maker to buy back shares in the market.
“I assume the stock will tank on this news, then I assume it might rally a bit. That has been the pattern of recent offerings with buybacks attached,” wrote analyst Travis Lundy of Quiddity Advisors, who publishes on Smartkarma.
Shares in Kokusai, which had a market capitalisation of roughly $8.5 billion at Tuesday’s closing price, have gained about 75% year-to-date.
The company is targeting improved margins and investors are rushing to back chip equipment manufacturers amid expectations investment in technology such as artificial intelligence will boost the sector.
(Reporting by Sam Nussey; Editing by Jamie Freed)
Comments