According to Reuters, Shares in Toshiba fell more than 19% in morning trade on Thursday, clocking a third day of heavy losses after the Japanese tech-to-nuclear conglomerate said earlier this week it faced a potential multi-billion dollar write-down.
Ratings agencies were quick to respond. On Wednesday, Moody’s downgraded the group, pushing it deeper into “junk”, or non-investment grade territory, with a Caa1 rating, from B3.
Moody’s Lead Analyst for Toshiba, Masako Kuwahara said the downgrade reflected “mounting concerns” over the corporate governance of the company, especially in relation to due diligence for acquisitions; adding: “Although Toshiba is still assessing the exact amount of the impairment loss, its financial metrics will likely deteriorate further, potentially resulting in a negative equity position”.
Since Tuesday, Toshiba’s share drop sponged about $6.5 billion off of its market value, letting shares plunging 20% on Wednesday at the market open, while on Thursday they were down another 18% at 255 Yen. Japan’s Nikkei shed 1.3% and Toshiba Bond yields have spiked too. The company’s 1.68 % Bonds due 2020 JP00526502=JSDA were yielding 5.57% late Wednesday, up from 1.77% on Tuesday, according to Thomson Reuters data.
Moves elsewhere were modest yesterday as Australia’s main index recouped early losses to finish flat at a 17-month peak, while stocks in Shanghai added 0.2% and MSCI’s broadest index of Asia-Pacific shares outside Japan was last up 0.19%.