Elpida Gains After Filings Show Goldman, Credit Suisse Buy Stock
Elpida Memory Inc. (6665) rose the most in five months in Tokyo trading after filings showed Goldman Sachs Group Inc. (GS) and Credit Suisse Group AG (CSGN) each own more than 5 percent of the world’s third-largest memory chip maker.
Elpida jumped 13 percent, the most since Sept. 13, to 349 yen at the close of trading on the Tokyo Stock Exchange. Japan’s benchmark Nikkei 225 Stock Average added 0.4 percent.
Goldman Sachs-related companies own a combined 6.07 percent of Elpida, according to a regulatory filing to Japan’s finance ministry yesterday. Credit Suisse Group companies held a 5.11 percent stake in the Tokyo-based chipmaker, another filing showed. Elpida faces an April deadline to repay 92 billion yen ($1.1 billion) in debt and said Feb. 14 there was “uncertainty” about its future, after saying Feb. 2 it expected to secure financing.
“The stock’s volatility is getting high, especially after it reversed its statement about the ability to repay loans,” Yuichi Ishida, a Tokyo-based analyst at Mizuho Investors Securities Co., said today by phone. Ishida has a “neutral plus” rating on the company’s stock.
Elpida said Feb. 14 it wasn’t able to reach a deal with Japan’s government and its main lenders to get financing for debt due in April. Japan Credit Rating, the only company that grades its bonds, cut the company one level to the lowest investment score of BBB- the same day and put it on a “negative” outlook.
Chip Prices
The chipmaker’s ability to repay the 92 billion yen in bonds and loans by the deadline has been eroded by slumping chip prices and five straight quarters of losses. Elpida is Japan’s biggest maker of dynamic random access memory, the most common chip used in computers.
Elpida, Hynix Semiconductor Inc. and other makers of DRAM chips lost a combined $14 billion in the past three years, according to Bloomberg calculations. The price of the benchmark DDR3 2-gigabit DRAM, which plunged to a record low of 71 cents in November, fell 57 percent to 91 cents in the past year amid slowing personal-computer sales, according to Taiwan-based DRAMeXchange, Asia’s biggest spot market for the chips.
Elpida lost 62 percent of its market value last year, extending a 37 percent slump in 2010.
To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
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