For a long time it was believed that October of this year would be a good time for the Japanese memory manufacturer Kioxia to enter the stock market in order to attract capital for its needs. With competitors’ stock prices falling, Kioxia has changed its mind about going public in October, Reuters reports.
Image source: Kioxia
The investment company Bain, which is the main shareholder of Kioxia, expected to raise funds from the placement of shares of the Japanese manufacturer based on the total capitalization of at least $10.5 billion, but now achieving this would be problematic. For example, shares of Samsung Electronics, SK hynix and Micron Technology dropped by about a third from their recent highs, so it is unlikely that investors would value Kioxia’s assets highly. Representatives of the company only stated in comments to Reuters that it is preparing to enter an IPO at the appropriate time.
The Japanese stock market suffered a sharp decline in early August due to an unexpected increase in the refinancing rate and fears about the start of a recession in the United States, but managed to regain its positions then. Rising average prices for solid-state memory improve Kioxia’s financial statements, but it is not enough to instill confidence in investors. The company occupies 14% of the global NAND memory market. Kioxia’s business is based on the assets of the former Toshiba Memory Corporation, which a consortium of investors led by Bain bought for $18 billion in 2018. In other words, Kioxia’s capitalization estimate of $10.5 billion would not be able to cover investors’ costs, and a lower amount does not appeal them even more so. The company failed to go public in 2020, and the merger deal with Western Digital was blocked by the Korean SK hynix, which has some interests in Kioxia capital since 2018.