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How can one unlock value


WeiChiLoh
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My family own ~10% of the share outstanding on a company. Management of this company owns ~40% of the share outstanding.

This company is listed, and has its entire market capitalization in cash, de minimis liabilities (yup, you heard that right). Needless to say, this is a Japanese company. However, its core business is highly capital destructive...barely turning a profit, if any.

The company also owns a great deal of real estate, which after consulting with several real estate brokers, we estimate to be worth nearly 1.5x - 2x of market capitalization.

However, after speaking to management, management is just adamant about doing anything about the situation.

 

What to do?

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Is this a Japanese company listed in Japan, or a Japanese company listed in Singapore?

 

If its the former, I don't think there's a lot that can't be done. There have been several high profile activism efforts by international investors, but that route doesn't seem to go down well. Steven Towns seems to have some effort, and you can check out his book.

 

If its the latter, I still think its almost impossible to effect change if management is hostile, especially if management owns 40% of the firm. The only way I can see activism taking effect is if management owns a small stake in the company, and you're able to with several people accumulate a large enough stake to put on a board member and work change from there.

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What to do?

 

You share the name on a message board like this one => wait until enough readers agree with your analysis and buy up shares => you nominate a new slate for the Board, and end up getting elected

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