Elpida Plunges by Daily Limit in Tokyo
The shares dropped 21 percent, the biggest decline since 2004, to 294 yen as of 9:54 a.m. in Tokyo before trading was suspended on the imbalance of orders. The chipmaker was offered at 294 yen as of 10:10 a.m. on the Tokyo Stock Exchange.
Elpida said yesterday there is “uncertainty” about its future as it hasn’t reached a deal with the trade ministry, the Development Bank of Japan and its main lenders, reversing a Feb. 2 statement that it expects to secure financing. The Tokyo-based company’s ability to repay 92 billion yen ($1.2 billion) in bonds and loans is made more difficult by plunging chip prices and five straight quarters of losses.
“The chip industry is in trouble,” said Edwin Merner, president of Tokyo-based Atlantis Investment Research, which manages $300 million. “Most commodity type chip companies are losing money and the business continues to be capital intensive.”
To contact the editor responsible for this story: Dave McCombs at email@example.com