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So this is somewhat interesting based on how Toshiba got here. At one point they were a pretty well respected company and then they ran into the same issue tha
by chollida1 3y ago
So this is somewhat interesting based on how Toshiba got here.
At one point they were a pretty well respected company and then they ran into the same issue that most conglomerates run into in that different parts of their business get different multiples and that often leads investors to give them the multiple of the lowest yielding portion of their business.
To help boost their stock price in the early 2010's they started to fudge their books and were caught and fined in the mid 2010's, I think it was over $6B in fines to indicate just how far they went to fudge their numbers.
After this they had alot of interest from activist investors as nothing attracts an activist investor like an old bumbling conglomerate. Its literally the typical hedge fund target/playbook.
- old company that has lost its way
- scandals affecting the companies books
- conglomerate that can be broken up and sold for pieces to unlock higher multiples in the market.
Now, instead of the activist hedge fund treatment, it will get the private equity treatment, where they'll break the company up but keep the name and spin the company back out in 5-10 years once they've sold off the divisions that can quickly make the investors money.
in the end the market determined that the activists were right and the company was way to big and diversified to be effective.
Sadly instead of the public benefiting from this breakup due to a bump in the share price and dividends being paid out from the breakup it will be a consortium of banks and other companies that benefit from this.
- ska 3y agothe breaking up has been going on for a while, e.g. Canon bought their medical line of business back in 2016.
- stg22 3y agoIn 2006, Toshiba bought Westinghouse Electric Company in one of the worst deals in history. Westinghouse negotiated fixed price contracts to construct nuclear reactors and Toshiba provided financial guarantees, so they ended up on the hook for massive cost over-runs. In 2017 alone, Westinghouse reported an annual loss of $9bn. and declared themselves bankrupt. Toshiba had to sell a load of businesses over the years to escape the Westinghouse black hole and repair their balance sheet.
- christophilus 3y agoDidn’t Brookfield buy Westinghouse? How do they plan on avoiding those same risks? Brookfield doesn’t strike me as the kind of company to repeat that sort of error.
- Tsarbomb 3y agoWestinghouse is owned by Brookfield Renewable Partners and Cameco. Cameco is the second largest uranium producer in the world. Brookfield Renewable Partners owns and operates a lot of power generation. Both are Canadian where there is a huge pool of both power generation and specifically nuclear power generation talent and experience. As an example until 2016 Canada had the largest operator nuclear power facility in the world, several provinces are currently in the planning phases of SMRs, and Canada will be financing CANDU reactors in Romania. It's safe to say they see some sort of advantageous vertical integration of the supply chain, as well as believing regulatory and economic outlooks being good.
- soperj 3y agoCANDU reactors are pretty spiffy. Can run on unenriched natural uranium, or even uranium mixed with thorium or plutonium. Design also comes with a lot of passive safety features.
- MichaelZuo 3y agoAll the debts were left with Toshiba, otherwise Westinghouse would have been worth far less than nothing, but the learnings would have been retained. And I imagine after such a traumatic experience they wouldn't be forgotten quickly.
- kylebenzle 3y agoI don't think you'll find any of this info online but TOSHIBA is the reason the US Navy has active personnel on ALL Japanese Self Defense Forces ships. ALWAYS, the US Navy has at least 1-2 people stationed on JSDF ships (I did 2 tours on a japanese boat). This is WILD because it came up as part of an agreement 20 years ago because it was discovered that Toshiba had put a backdoor on all Toshiba hard drives. Basically the US told Japan, either we release what Toshiba did, or you put our Navy guys (I only know navy but probably other branches too) on your boats. Japan agreed, the scandel went away and Toshiba was left to rot as a zombie company. Maybe your financial reason got them where they are today, but Toshiba was effectivly dead 20 years ago when they screwed over the US and Japanese governments at the same time, crazy that Japan let them zombify for 20 years.
- quesera 3y agoHow can a discerning reader tell the difference between this story and an unsubstantiated rumor? "backdoor on all Toshiba hard drives" is an enormous security concern for all world citizens.
- lokar 3y agoWhat would a HDD “back door” even consist of 20+ years ago?
- kylebenzle 3y agoNo idea, I only got told the story by the commander while we were drinking in our state rooms in the JSDF ship, maybe he was lying? Importantly though they said it was sending data back, THAT was the issue because the navy had used their drives, so basically stealing us gov data.
- FirmwareBurner 3y ago>No idea, I only got told the story by the commander while we were drinking in our state rooms in the JSDF ship, maybe he was lying? Military staff would never lie and are also known to be very tech savvy. Story seems legit to me.
- numpad0 3y agoThe funniest artefact that came of Toshiba embellishment scandal was the sales figures chart for its PC division[1]. Up there with TI and Broadcom in terms of signifying who they are - blue line is sales and red line is profit, but it might as well be a 7805 without a capacitor shown on an oscilloscope. 1: https://cdn-ak.f.st-hatena.com/images/fotolife/t/topisyu/20150721/20150721142006.jpg https://cdn-ak.f.st-hatena.com/images/fotolife/t/topisyu/201... / https://archive.is/4Dyzj https://archive.is/4Dyzj