February 14, 2017 – It seems that Toshiba’s troubles are not going away that easy. In fact, it seems to me that their troubles are only getting bigger. Today, a lot of confused investors and other spectators watched the legendary company, Toshiba, displaying lack of discipline and authority. It seems like no one is in charge and the faith of this multinational company now hangs in the balance. To me, this current situation at Toshiba’s headquarter looks very serious. It is do or die kind of situation and today’s fiasco has left Toshiba’s face value less than $9 billion after its shares took a dive down into the red zone. Its share price has decreased by approximately eight percent in today’s trading session.
Toshiba was going to release their annual earnings report today, but that didn’t happen. First, there were several delays and there was a lot of ambiguity surrounding the release of today’s earnings report; everyone sat down and waited for some clarity. After some delays and lot of confusion, investors finally learned that the company is not releasing the earnings report today; they are going to do that in mid-March. Why didn’t they release the report? Well, there is so much confusion in the air that we cannot tell for sure why this has happened. The official word is that the company needs more time to investigate its nuclear business failure in USA and that the audit team hasn’t yet approved the annual earnings data.
One thing that we now do know is that Toshiba has suffered a loss in access of $6 billion from its failing nuclear subsidiary in USA. This loss means that no matter what happens, the company’s annual earnings report will show a big loss. This also means that investors, or shareholders, are not going to get any dividend. Traders who have purchased Toshiba’s shares few months back are in troubling situation. They cannot sell the shares as the price has dropped significantly and from the looks of it, the situation is only going to get worse from here.
Toshiba has certainly lost the confidence of investors, but I hope they can still save the company. The $6+ billion loss from the nuclear investment should teach them a lesson or two about not investing money in dead businesses. When Toshiba was planning to buy the nuclear businesses in USA, many analysts screamed about how bad this deal would be for Toshiba, but they didn’t listen to any warnings. The lack of proper management and planning is going to cost this company in billions.