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2009 Japanese IPOs December 4, 2009

Posted by fukumimi in Economy & Business, IPO, Japan.

So, a grand total of 19 IPOs for the whole of calendar year 2009.

Down from 49 last year (and the market thought that was bad…)

Looking on the bright side, I don’t think it is physically possible to go even lower next year. Yay!

On the other hand, a V shaped recovery back to the heady bubble days isn’t going to happen. So tough times ahead for people trying to make a living on supporting the IPO and venture markets…

As for concrete numbers, we are hearing estimates from 30~60 new IPOs next year. Some people are eternal optimists it seems….

Gree’s IPO and service outage December 20, 2008

Posted by fukumimi in Internet, IPO, IT, Japan.

Gree, Japan’s #2 (and original) SNS had its IPO on Dec 17th, instantly valuing the company at an eye popping JPY110B ($1.2B), with PER of 170 and PBR of 104. This makes Gree worth more than the #1 SNS, Mixi, which is currently valued at $900M, which is trading at a PER of 43.

Gree has approx 7 million “users”, which puts it far behind Mixi which claimed it passed 15million in the summer. The interesting thing about Gree is that it is, for all intents and purposes, a mobile internet SNS, with more than 98% of page views from mobile devices, although it originally started as a PC service. Mixi has a more even split between PC and mobile, 33:67 according to the most recent published figures.

An interesting development occured yesterday, when Gree’s service went down after lunch.  Gree was very slow in releasing details of the outage, and there are claims on the internet that Gree investor relations initially claimed the outage was due to “maintenance”.

Sakura Internet, Gree’s datacenter provider, has announced that the problems were due to an electrical fire, but says the problems only affected one of the two redundant power lines. If this were true, it would appear that the users affected (which included not just Gree but also So-net’s blog service and Seesaa, another blog platform provider) have some deployment issues they need to take care of.

More interestingly, on page 17 of their IPO filing, Gree states that its “systems are distributed across multiple datacenters to ensure stable operations”.

It appears that yesterday’s outage was total and complete, as far as its gree.jp SNS service was concerned, which raises the question about its representations in the IPO filing.

Or maybe the reference to systems distributed  across multiple datacenters refers to the fact that its corporate website is housed in a different datacenter – gree.co.jp, the corporate website appeared unaffected during the time the gree.jp service was out, not that that is of any use to users who could not access the service……

Perhaps Gree will use the money raised in its IPO to move to a more reliable datacenter and reevaluate its system architecture….

Japanese mobile internet venture sells off overseas businesses at a significant loss February 28, 2007

Posted by fukumimi in Economy & Business, Internet, IPO.

For-Side.com, originally one of the big Japanese mobile content providers (ie ringtone merchants – though they have branched out into other things like content (music, video) creation and distribution) has announced that it is selling its overseas operations which operate under the iTouch group banner to concentrate on domestic activities.

It had purchased the iTouch operations (which previously was a member of the FTSE 100 Techmark index) in May 2005 for 184million pounds in cash……..

The company is being sold to a group led by the ex-CEO of iTouch for 7.6B Yen, which today is about 33million pounds.

I don’t think I need to bother commenting any further….

The company had grown through an acquisition strategy, which clearly hasn’t worked.

Shares were trading (on Jasdaq) at JPY6670, off nearly 80% compared its 52-week high of JPY32,300. It had traded at over JPY200,000 back in the middle of 2004.

To end this post, I’ll leave you with Reuter’s one line comment about this company:

Rapidly selling its acquisitions. Mobile contents business minimal. If overseas businesses are sold, what remains is basically just a consumer loans business.

And this is the state isn’t unique for a listed Japanese “internet” company. Like Livedoor before it, this company probably doesn’t deserve to be called an internet company, if that definition is to have any meaning. Consumer loans (read:  legalised loan sharking at up to 28% APR) and an M&A vehicle seems to be the right characterisation of this company.

And another example of a failed attempt by an young Japanese company to expand overseas. Hint: You need a real business to succeed….

2006 Japan IPO data digested (Part 2 of 2) January 23, 2007

Posted by fukumimi in Economy & Business, IPO, Japan.

So, here are some other statistics regarding the IPO situation last year:

Average gain on IPO price (offer price vs initial trading price) was 77%, down from 133% in 2005. Looking at the main 3 venture markets (Jasdaq, Mothers, Hercules) the average was 97.5% gain (J-60%, M-104%, H-148%).

On average, numbers seem to be becoming a little bit more sensible, compared to the year before.

Maximum gain was 773% (JTEC) and worst performer was KFE Japan which hir 41.6% below the offer price (it listed on Nagoya Centrex, a regional market).

JTEC had sales of JPY2.8B and net earnings of JPY0.18B (about $2M) and at the initial trading price was valued at JPY17.4B, or about $200M.

Other top performers include eBASE, a database software company which went up 543%. Revenues of JPY0.67B, earnings of JPY0.18B, valuation: JPY16.1B

Third was Hikaku.com, the Kakaku.com rip-off that I’ve written about before, up 500%. Revenues JPY0.57B, Earnings JPY0.25B, valuation: JPY84.7B……….

The big IPOs were dominated by old economy stock, led by Nomura Real Estate raising JPY126B and Idemitsu raising JPY109B. Perhaps worthy of note was #7 on that particular list, Accordia Golf, the Goldman Sachs golf course roll-up vehicle, which raised JPY9.8B

Valuation spread (based on initial trading price):

<JPY1B    2

<JPY2B   3

<JPY5B    29

<JPY10B    41

<JPY20B    56

<JPY50B    33

<JPY100B    11

>JPY100B    13

Substantial increase in total <JPY5B valuation companies, from 11 in 2005 to 34 in 2006. Is it an indication that underwriters are keen to push IPOs out early, sensing a possible downturn…?

PER (initial trading price)

<10    2.7%   (2005 – 1.9%)

<20   25.5%   (2005 – 20.1%)

<30    21.8%   (2005 – 14.5%)

<50    19.1%   (2005 – 21.4%)

<100    18.1%   (2005 – 20.1%)

>100    12.8%   (2005 – 22%)

Again, a little bit more sensible numbers, at least compared to the crazy 35 companies hitting PERs >100 in 2005.

However, internet related sectors were still hot, with 15 out of the 24 stocks hitting PER >100 being in this sector. Standouts include Mixi (PER 210, valuation JPY208B), Hikaku.com (PER 567, JPY84.7B), Drecom (PER 572, JPY68.6B), Raccoon (PER 238, JPY29.5B, OKWave (PER 235, JPY13.4B).

For the vast majority of these “hot stocks”, the initial price is was the highest price they posted through the year. Let’s look at their current valuations (and change from the initial trading price).

Mixi –  JPY166B (Down 20% in 4 months)

Hikaku.com – JPY9.4B (Down 89% in 10 months)

Drecom – JPY36.9B (Down 46% in 11 months, down  more than 2/3 from its first week peak price)

Raccoon – JPY3.8B (Down 87% in 9 months)

OKWave –  JPY8.67B (Down 35% in 7 months)

Notable Trends

ICT/internet/mobile sector –  Continued where they left off in 2005 (which saw 77 IPOs) , and had another strong year (a total of 88 out of 188 IPOs belonged to this category – 47% of all IPOs)

Financial Service – We saw IPOs of the first M&A advisory firms (GCA and Japan M&A Center) and equity research firms (Fisco, Japaninvest Group, T&C Holdings)

System Integrators & Software houses – 24 IPOs of SI/software companies in ’06, up from 16 in ’05. Industry specialisation, consulting and new business models are notable trends. Examples are companies claiming expertise in Private Information Protection Law compliance, J-SOX (which is not a single act but an unsightly mishmash of new and updated laws and directives) compliance, nursing care industry specific solutions, amongst others.

In other news,

For people who like faux-British pubs, the company behind the “Hub” chain of British themed pubs also IPO’d last year (April 3rd, on Hercules).  Current valuation is JPY3B, down from more than JPY12B at its peak. (At its peak, it would have had a PER of about 170, which is, well, silly…)

2006 Japan IPO data digested (Part 1 of 2) January 22, 2007

Posted by fukumimi in IPO, Japan.
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Long overdue post….

No analysis , just raw data. (OK, maybe the odd comment or two as I can’t help myself)

Total Number of IPOs


for reference…


2004- 175

2003- 121

2002- 124

2001- 169

2000- 203

1999- 107

1998- 86

1997- 142

VC “funded” companies

129 out of 188, 69%. (Of the other 59 companies, 49 were subsidiaries of large corporations or took more than 10 years from founding to IPO)

(2005-64%, 2004-70%, 2003-76%)

IPOs by listing market

JASDAQ 56(30%)

Mothers 41(22%)

Hercules 37(20%)

(Above are the major alternative/emerging/high growth markets)

TSE-1 13(7%)

TSE-2 16(9%)

OSE(Osaka) 3(2%)

NSE(Nagoya) 14(7%)

Others 8(4%)

Industry Sector

Services* 42

ICT* 39

Retail 27

Wholesale 16

Real Estate 16

Machinery 9

Electrical Equipment 6

Other manufacturing 5

Securities/Commodities 5

Food&Beverage 4

Chemical 3

Banking 3

Other financial 2

(Others 11)

*Services/ICT breakdown

SI, Software devlopment/sales 24

Internet Services 20

Human Resources 9

Financial services 5

Mobile related 3

Real Estate services 3

Others 3

Games 2

Medical/healthcare services 2

Wedding/Funeral services 2

Advertising/Promotional services 2

Leasing 1

Industrial waste services   1

Enertainment 1

Magazine publishing   1

Distance Education 1

Vocational Schools    1

Leisure/Sports services   1

Location of company headquarters

Hokkaido/Tohoku 7 (4%)

Kanto(ex-Tokyo) 10 (5%)

Tokyo 105 (56%)

Chubu/Hokuriku 14 (7%)

Kinki(ex-Osaka) 13 (7%)

Osaka 27 (14%)

Chugoku/Shikoku 6 (3%)

Kyushu/Okinawa 6 (3%)

Average time to IPO

across all IPOs 20.9years

JASDAQ average 27.7years

Mothers average 9.4years

Hercules average 12.6years

Shortest Time to IPO (Top 3)

Acrodia 2years 4months

GABA 2years 6months

GCA 2years 7months

Longest Time to IPO (Top3)

Azuma Shipping 88years 3months

Kochi Bank 76years 2months

Aizawa Securities 72years 5months

Japan 2006 IPO roundup December 27, 2006

Posted by fukumimi in Finance, IPO, Japan.
1 comment so far

We’re all done with IPOs on the Japanese exchanges for this year.

Some headline numbers:

  • Total number of IPOs: 188
  • 20 failed to post initial prices above the subscription price
  • 36 companies (or perhaps 37, depending on how eBASE does. The company listed on Dec 26th but has yet to trade in two days, buys outnumbering sells by approximately 30:1, and looks like the initial trades will occur at a level of PER>100) posted opening prices which translated to an initial price trailing PER >100
  • Highest initial price PER was Drecom (Feb 9th), at 953.94
  • 8 companies had initial price trailing PER<10, and a further 2 companies were loss-making for the most recent financial reporting period

More stats when I’ve had a chance to get the data into Excel.

Mixi IPO day 2 review (and my latest swipe at TechCrunch) September 15, 2006

Posted by fukumimi in Internet, IPO, IT, Japan, TechCrunch.

After posting a price of JPY2.95M at the beginning of the day and dipping as low as JPY2.56M in the early afternoon, the stock rallied to close at JPY3.12M, which translates to a valuation of JPY219B, just shy of $2B. Trading volume was 10,203 shares.

With approx 25% of shares held by VCs who aren’t subject to lock-up, it is certainly likely that there won’t be any supply side problems. It’ll be interesting to see if the 2 VCs offloaded a substantial portion of their holdings today.

Given this is the world’s first SNS IPO, and probably the biggest “Web2.0” exit thus far, it is surprising that TechCrunch haven’t felt this is a matter worth covering. You’d think that with their “Japanese Editorial Team”, they would have their finger on the pulse…..

Yes, this is my latest dig at TechCrunch regarding their reticence about giving us more details about TechCrunch Japanese, especially since they have not replied to my two emails. Maybe the problem is that I actually wrote to editor-jp@techcrunch.com in Japanese…. Maybe I’ll be bothered one of these days to redraft the letter in english and send it to Michael Arrington directly. Perhaps he is actually unaware of the fact that such an inquiry has been lodged with the “Japanese Editorial Team”. But then again, Gen Kanai did say his comment on TechCrunch regarding this issue was deleted…. Not the way I would have expected a self-proclaimed “Web2.0” blog media outfit to have handled this situation…..
Anyway, for those that read Japanese, here’s the original email I sent out…..






日本語版開始当時にMichael Arringtonに「TechCrunch本家や仏語版は記事の作者や翻訳者が明記されているのに、日本語版では翻訳・編集に関わっているメンバーの顔が見れず、Web2.0を題材にし、さらにブログフォーマットのメディアとしては違和感を覚えるが、どのように考えるか」と質問した経緯があります。その際、Arrington氏は立ち上げで多忙だが、いずれこの点に関しては対処するとの回答を頂きました。( Arrington氏曰く:”I totally agree that the “team” needs to be announced and hopefully it will soon. Let us just take our first steps.”)




“TechCrunch UK is obviously not a translated blog like TechCrunch France and TechCrunch Japan (although both of these blogs have lots of original content as well).”


“TechCrunch UKはTechCrunch France TechCrunch 日本語版のようなTechCrunchの翻訳サイトとは明らかに異なるもの。”






そもそも、日本語版には”lots of original content”があるのでしょうか。日本語版を読めない英語版読者向けの誇大広告のように映ってしまいます。(これは日本語版編集チームの問題ではありませんが)








I really don’t have anything against TechCrunch, honestly. They provide a valuable service to the community of users who are interested in the whole “Web2.0” phenomenon/trend/revolution/fad/bubble/whatever. However I happen to think that it seems to be such a waste to have a Japanese team and then not cover what is what would be a pretty big deal for “Web2.0” (if social networking is “Web2.0”, and I think the consensus is that it is) if there was an SNS IPO (or billion dollar exit of any nature in the Web2.0 arena) in the US.

Mixi IPO Day 2 September 15, 2006

Posted by fukumimi in Internet, IPO, IT, Japan.

Trading on the 2nd day has started with sell orders outstripping buy orders at the start price of JPY3.15M, and the first transaction was executed at JPY2.95M.
The Mixi IPO was all over the news last night, with many analysts questioning the valuation (at yesterday’s close the valuation was JPY222B) as overpriced.

The critical coverage and a night’s reflection may have brought many potential buyers to their senses.

However, that does not necessarily mean that the stock will not go higher, several recent IPOs have seen strong short term movements after an initial case of cold feet.In the long run (through 6 months or so), Mixi will probably settle down at around the issue price, based on comparisons of PER with other stocks on the Japanese emerging markets exchanges.

The Mixi coverage on the media was funny to watch. Commentators were either knowingly or through ignorance, misrepresenting facts. The oft debated distinction between number of accounts and actual users was glossed over, and many were giving the impression that somehow Mixi was more trustworthy because users had to fill in a profile. Just a quick look would show that many users elect set up a profile which is limited in scope or downright fictional.

Still, the fact remains that Mixi has eyeballs, average user times and page views would indicate that it has top class advertising real estate.

Mixi IPO related news September 14, 2006

Posted by fukumimi in Internet, IPO, IT, Japan.
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DoubleClick, the on-line advertiser, was up 9.5% today. (and was up strongly yesterday as well)
DoubleClick counts Mixi amongst its “DART for Publishers” ASP advertising service customers.

Netage and CyberAgent, both large shareholders of Mixi, were up at the start of the day but edged downwards, ending in negative territory for the day.

Mixi is now the 2nd highest valued company on MOTHERS, behind ACCESS, which has JPY17B in sales, and is valued at JPY285B….

Mixi IPO today September 14, 2006

Posted by fukumimi in Internet, IPO, IT, Japan.

Mixi (ticker: 2121.t), the #1 Japanese SNS with a claimed 80%+ domestic market share is now listed on MOTHERS.

Issue price was JPY1.55M, and the price is heading skywards. Checking the news on 2121.t on our Bloomberg terminal at work, at the start of trading, buy orders were outnumbering sell orders 19 to 1.

The price has edged above JPY3M (close at JPY3.15M) at the end of the first day of trading, with a balance of 5000 buy orders meaning that no shares were traded on the first day.

The TSE has announced that it has set the maximum upward price fluctuation at double the previous day ‘s (today’s) close, which would mean that it could go up to JPY6.3M by the end of tomorrow.

The current share price values Mixi at JPY222B (nearly $2B) and makes the 30 year old CEO an instant billionaire (at least on paper).