Kadokawa Shares Plummet as Sony Opts for Stake Increase Over Acquisition
Kadokawa shares are set to fall sharply after Sony announced a capital tie-up instead of an acquisition, raising its stake to 10%.
Shares of Kadokawa Corporation are poised to experience a significant drop following the announcement that Sony Group will increase its stake in the company rather than proceed with a full acquisition. The decision, revealed on Thursday, involves Sony investing approximately 50 billion yen ($317 million) to acquire new shares, making it the top shareholder with a 10% stake. This move comes as a surprise to investors who had anticipated a premium acquisition offer from Sony, leading to a surge in Kadokawa's stock price by about 45% over the past month.
On Friday, Kadokawa's shares were untraded in Tokyo due to a flood of sell orders at the daily limit low of 3,689 yen. The market's reaction reflects the disappointment over the absence of a tender offer bid, which many had expected. Despite this, Sony's shares rose by more than 2%, as the limited capital tie-up allows the company to allocate resources to other projects. The Nikkei average remained relatively flat.
Sony's strategic investment in Kadokawa is part of its broader effort to enhance its entertainment content creation capabilities. The two companies plan to collaborate on various initiatives, including the production of live-action films, television dramas, and anime works using Kadokawa's intellectual property. Kadokawa, known for its diverse business operations ranging from publishing to video game production, has been in the spotlight recently due to its successful "Elden Ring" game, developed in collaboration with Bandai Namco Entertainment.
Sony's entertainment segment, which includes games, music, and movies, has become a significant revenue driver, accounting for nearly 60% of its overall revenue in the latest fiscal year. This strategic move to increase its stake in Kadokawa aligns with Sony's ongoing efforts to expand its entertainment portfolio, following several high-profile acquisitions in recent years.
Articles published about this story
- marketscreener.com
More stories
Robinhood Markets, Inc. has seen its stock price surge to a new 52-week high, driven by positive upgrades and a favorable market environment. The company's performance in 2024 and its position in the penny stock market have also contributed to its recent success.
Hino Motors, a subsidiary of Toyota, faces criminal charges in the U.S. for selling over 105,000 non-compliant diesel engines, marking a significant scandal in the automotive industry.
Instagram, owned by Meta, experienced a significant outage in the US on January 15, 2025, which was largely resolved by the afternoon, as reported by Downdetector.
BlackRock Inc. reported a record $11.6 trillion in assets under management in Q4 2024, driven by strong market performance and strategic acquisitions, leading to a rise in its stock price.
- investiment.io
General Motors has signed a multi-billion dollar agreement with Vianode to secure synthetic graphite for its electric vehicle batteries, aiming to reduce reliance on China and enhance EV production.
- investiment.io
The Bank of New York Mellon Corporation (BNY) reported a robust Q4 2024, with earnings and revenue surpassing expectations, leading to a significant rise in its stock price.
JPMorgan Chase reported a record annual profit and a significant Q4 earnings beat, driven by a surge in investment banking fees and trading revenue, surpassing Wall Street expectations.
- investiment.io
Meta Platforms Inc. plans to cut approximately 5% of its workforce, focusing on low performers, as part of its ongoing efficiency drive. CEO Mark Zuckerberg announced the move in an internal memo, signaling an 'intense year' ahead with a focus on AI, smart glasses, and social media innovation.
Pfizer is set to significantly reduce its stake in Haleon, the maker of Sensodyne, to 7.3% through a £2.5 billion share sale, as announced by bookrunner J.P. Morgan.
Boeing's stock experienced a decline following a significant drop in aircraft deliveries in 2024, marking the lowest delivery numbers since the onset of the COVID-19 pandemic. The company faced challenges including a labor strike, production issues, and increased competition from Airbus.