Mitsubishi Share Price
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We will keep track of major events affecting MMC's share price. Stock price movements will be mentioned a few times. Mitsubishi Fuso is privately owned and DaimlerChrysler holds 65 percent stake in it.
Some of the Major Events Affecting Mitsubishi Motors' Share Price
June 8, 2004. DaimlerChrysler revealed that it might sue MMC to recover part of its investment of over $1 billion in Mitsubishi Fuso Truck and Bus, in light of its hiding its truck problems for eight years. In other news, while the trouble automaker announced that it has raised slight more (15 billion yens) from its group companies than was planned for, Phoenix Fund's CEO Yasushi Ando said in an interview, that while it has committed 20 billion yen of its own money, and 50 billion yen of unidentified foreign investors, its current shortfall is 30 billion yen, and it is looking difficult to raise that because potential investors are skeptical about the company's future after hearing about the lastest recalls.[Bloomberg]
June 18, 2004. Tokyo. MMC's share prices reached all-time low. A second Fuso truck caught fire during the night, suddenly bursting into flames in a parking lot, for unknown reasons, sparking fear among investors that more fire accidents might follow. "There was a smell like burning rubber coming from under the passenger seat. Then I heard a shuddering noise followed by a loud bang," the driver told the investigators. Mitsubishi Fuso previously had said that some of its trucks' wheel bearings are faulty, which may cause smoke and fire. In the case of the previous truck, the front part of the truck began burning while it was being driven. Out of the 13 analysts that follow MMC, one has a "hold" rating, rest 12 have "sell" ratings.
June 20, 2004. Tokyo. Daily Yomiuri reported that 4 nonlife insurance companies - Sompo Japan Insurance, Mitsui Sumitomo Insurance, Aioi Insurance and Nipponkoa Insurance, are reviewing accident cases involving MMC vehicle to determine whether auto defects played roles in those accidents, and if so, how much to demand MMC for compensation. The only other nonlife insurance company - Tokio Marine and Fire Insurance - belongs to Mitsubishi group and was more refrained in its statement. If a defect is partly to blame, then the company will reduce the rate of the driver's burden or exempt the driver entirely, and review the premium raise.
June 21, 2004. Tokyo. Channel News Asia reported that ratings agency Standard and Poor's lowered its rating on Mitsubishi Motors's senior unsecured bonds from a speculative B-minus to CCC-plus, implying the debt issue is vulnerable to default. It quoted SP as stating "recent disclosure of additional safety defects -- which have led to further damage to MMC's already-weak brand image and plummeting domestic sales -- call into question MMC's viability." It also added that "Particularly given the damage that has occurred to its brand image, plus increasingly fierce competition in key global vehicle markets, it is increasingly unclear whether pending operational and financial restructuring measures will be sufficient to ensure MMC's survival."
June 21, 2004. Foollow up on June 20 story. Yomiuri Shimbun reported that Aioi Insurance Co., a major causalty insurer, is asking Mitsubishi Motors to pay it about 30 million yen it paid to a victim of a traffic accident.In that accident, that happened in the northern Kanto region in December 1999, a tire that came off an MMC vehicle, hit a passenger car and seriously injured the driver. At that time fractured hub was not detected. Recently Aioi reexamined past accidents resulting in casualties and property damage involving large vehicles made by MMC in view of Mitsubishi Fuso admitting that it hid product defects and found MMC's defective part to be responsible. MMC is maintaining that there was a problem in maintenance.
June 28, 2004. Frankfurt. In an interview with German newspaper Tagesspiegel, DaimlerChrysler board member Eckhard Cordes said his company plans to take legal action after determining the amount of losses on the investment. (Kyodo News)
June 28, 2004. Standard & Poor's on Monday cut its corporate-credit rating for Mitsubishi Motors to SD, meaning the car company could selectively default on debt.
July 6, 2004. Nihon Keizai newspaper reported that the company said in its fiscal 2003 securities report for investors that its common shares may be delisted. Its shares fell on this news. Yasuhiro Matsumoto, a credit analyst at BNP Paribas Securities (Japan) said: "When Mitsubishi Motors shares are delisted, it makes it difficult for the automaker to raise money from the market. Their shareholders will also lose the market to buy and sell shares and lack liquidity." Matsumoto said that if the Tokyo-based automaker sells as much as 546 billion yen of preferred and common shares to companies such as Phoenix Capital Co., stock market regulations may require the company to delist its shares since as a result of the share placement, the proportion of Mitsubishi stock available for trade may fall below the 20 percent threshold required by the exchange.[Bloomberg]
July 6, 2004. Tokyo. [Bloomberg] Japan's government is looking into ways to help save Mitsubishi Motors Corp from the impact of slumping sales and deteriorating brand name, Shoichi Nakagawa, Japan's Trade Minister, said in Tokyo.
July 9, 2004. Tokyo. (Kyodo news). MMC seems to have asked its union to approve its plan to speed-up closing of its Okazaki, Aichi plant. It plans to move most of its 1,800 plant workforce to Kurashiki, Okayama plant. A few will be shifted to the Pajero SUV plant in Sakahogi, Gifu, and some to plants either in the town of Kosei, Shiga, or in Kyoto. Stock price moved up on this news.
July 14. Phoenix Capital had earlier promised 100 billion yen. Well, today it paid 74 billion yen. JP Morgan Chase had promised Y150 billion, but it paid only Y126 billion. Against the original promised total funding of Y546 billion, Mitsubishi Motors received Y496 billion, Y50 billion short of its target. Its stock price fell by 23, a 14 percent drop, to all-time new low of 137.
July 16. Tokyo. MMC's share are in free fall touching 104 yens today. Yesterday it dropped by 14 percent to close at 137.
SPECIAL: July 27, 2004. MMC closed at 98 yens, the first time in its history to close below 100 yens. On August 3, it closed at 79 yens. On August 4 it closed at 76 and in earlier trading it had touched 72. Bloomberg reported that traders are selling the stock in an attempt to reduce the price before J.P. Morgan Chase calculates the price for converting 41.6 billion yen of Mitsubishi Motors' preference shares into common stocks on Aug. 13, said Shinko Securities's strategist Tsuyoshi Segawa.
A few older stories in reverse chronological order (Newer ones first)
New Restructuring Plan Revised soon after announcement because of poor sales and new recall scandals.New Restructuring Plan Details
Daimler Chrysler Decides to Quit Mitsubishi Motors' Resue Plan