Nikko Cordial Bouncing Around; I'm Not Selling

Yesterday I posted that Nikko Cordial (NIKOY) ADRs had largely recovered from their price drop since the accounting scandal. So, of course, the stock plunged nearly 15% in Japan overnight in reaction to a media report that the company would be delisted from the Tokyo Stock Exchange. The TSE denied the report.

The decision about whether or not to delist Nikko should come in mid-March. So don't be surprised if more of these reports cause price swings in the company's stock.

On a related note, some reporting indicates that a delisting will play a major factor in what Citigroup eventually does -- such as Citigroup boosting its stake if Nikko doesn't get delisted. And trying to buy it outright if it does. Keep in mind, there is all sorts of speculation out there -- not to mention ongoing talks behind the scenes between Nikko, Citigroup and Mizuho Financial.

If you've followed my moves with Nikko Cordial since 2005, you're up nicely overall. I'm not selling my remaining ADRs. My advice for anyone in my position is to hold. But, as always, you have to make up your own mind.

Comments

[Gen Kanai:]

A number of people I know are outraged by the fact that a delisting is even being considered here. There would be so much investor value crushed by a delisting, when in fact only certain people were responsible for the accounting misreporting.

The way the NYSE and the TSE handle delistings are pretty different and the TSE seems to be less investor-friendly.

2007 Mar 01 12:39 AM

[Darrel Whitten:]

Regardless of what foreign investors think, I hear that the TSE was outraged by initial pressure tactics from Nikko Cordial to have the stock removed from the supervisory post, and TSE chief Taizo Nishimuro was on TV in Japan last night indicating that the TSE is not yet ready to let Nikko off the hook.

2007 Mar 01 03:59 AM

[Steven Towns:]

Are we seeing an overzealous TSE trying to make an example out of Nikko? And how about Sanyo getting off the hook with the SESC?

2007 Mar 01 10:15 AM