Several billion dollars are in danger of being cut from Japanese conglomerate corporation Toshiba after the company announced that their nuclear division in the US is under trouble. The company also announced that it is reviewing the sector to whether it is still crucial for Toshiba to be present in the said industry as it may be damaging the company already.
The top Japanese company also stated that the accounting of Toshiba’s nuclear division may have affected the overall production of the company as their financial status grows foggy. Toshiba chief executive Satoshi Tsunakawa announced last Tuesday in a press conference in Tokyo that they are also currently coming up with more ways to increase their capital this includes a strategy.
Toshiba announced that the spending and budget for the power projects handled by CB&I Stone & Webster Inc were far more expensive than what the company have anticipated which will lead to a possible writedown of the said acquisition.
Shares also tumbled to record-lows after the company also announced that the nuclear power sector of the company in the US could possibly face a multi-billion charge. The company has yet to fully comment on the possible charges against the business which they were able to acquire last year.
The company’s current chief executive Tsunakawa who took over the position last June has also pushed through with some efforts to boost their capital.
The company is currently bracing to recover from all the possible effects of a $2 billion writedown for the said nuclear business on top of its current efforts of recovering from a $1.3 billion accounting scandal further shaking investor confidence on not just the management but to the company as a whole itself.
From the previous trading session’s close of 3.76, the shares of the company are now trading at around 3.27.
The RSI indicator also dropped beneath the 30 level by only a fraction but still indicating an oversold stock.
Investors are also taking a closer watch at the company’s nuclear sector business as it is in danger of growing weaker significantly. The company recently almost recorded huge losses after their shareholder equity comprised only 7.5% of the company’s assets.
The company’s direction to focus on their nuclear and semiconductor sector as their primary source of growth for their company proved as a challenge as they tried to lessen their focus on consumer products and electronics such as monitors, television sets, and personal computers.
Prior to the 20% decline, the shares of the Japanese corporation initially dropped to as much as 12% during early Tuesday trading on earlier reports of the writedown while the confirmation from Toshiba’s management through a press conference later that evening confirmed the investor’s worst fears sending to stock to trade lower at around 20%.
This also comes at a bad time for the company as the aftermath and consequences of the recent accounting scandal have been slowly clearing the company’s premises.
As the company is recovering from a recent scandal, it is set to face more difficulty in being able to issue investors more shares making it hard for them to raise their capital or their funds.