Morgan Stanley, Goldman Shorted Takefuji Ahead of Bankruptcy
Morgan Stanley and Goldman Sachs Group Inc. each short-sold more than 1 percent of shares of Takefuji Corp., Japan’s third-biggest consumer lender that filed for bankruptcy today, according to data compiled by Bloomberg.
As of Sept. 24, Morgan Stanley shorted 2.29 million Takefuji shares, or 1.6 percent of the stock outstanding, while Goldman Sachs shorted 1.76 million shares, or 1.2 percent, according to the data. Takefuji fell by its daily limit to 116 yen at the 3 p.m. close of Tokyo Stock Exchange trading, before the bankruptcy announcement.
Mika Watanabe, a Tokyo-based spokeswoman for Morgan Stanley, and Hiroko Matsumoto, a Tokyo-based spokeswoman for Goldman Sachs, said they can’t comment on specific share trades.
Short selling is the sale of stock borrowed from shareholders in the hope of profiting by repurchasing the securities later at a lower price and returning them to the holder.
Financial institutions are required to report to the Tokyo Stock Exchange when they short-sell 0.25 percent or more of a stock’s outstanding shares. The rule took effect in November 2008 after stocks plunged in the wake of the collapse of Lehman Brothers Holdings Inc. in September of that year.
There has been concern over Takefuji’s financial health in the market for a long time, said Masayoshi Yano, a senior market analyst at Meiwa Securities Co.
“Companies that do business with Takefuji may have sold part of their holdings through foreign brokerages for hedging purposes ahead of its bankruptcy,” he said.
To contact the reporter on this story: Eijiro Ueno in Tokyo at e.ueno@bloomberg.net.
To contact the editor responsible for this story: Chian-Wei Teo at cwteo@bloomberg.net.
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