9 months ago
Tsuruha Holdings Faces Potential Short Squeeze
Tsuruha Holdings is a company that has seen a lot of people betting against its stock, called short selling.
This happens when investors borrow shares to sell, hoping to buy them back later at a lower price.
Right now, Tsuruha's stock has gone up a lot, and some people think it might go up even more when the company reports its earnings.
If that happens, those who bet against the stock might have to buy it back quickly at a higher price, causing a 'short squeeze.'
This could make the stock price jump even higher.
Some experts think this might happen, while others believe the stock might not go up as much because of other factors like tensions between China and Japan affecting tourism and retail sales.
Tsuruha Holdings has the highest short interest in the Topix 500 at 24.9% of free float.
The stock has rallied about 60% this year to ¥2,800 due to a merger with Welcia Holdings.
Aeon's tender offer at ¥2,900 per share could increase its stake to 50.9%.
Earnings report scheduled two days after the tender offer closes could trigger a short squeeze.
Some analysts warn of a potential short squeeze if earnings beat expectations, while others see it as unlikely due to external factors.
- Who
- Tsuruha Holdings Inc., short sellers, Aeon Co.
- What
- Potential short squeeze due to tender offer and earnings report
- Where
- Japan
- When
- Two days after the tender offer closes
- Why
- High short interest and potential earnings beat could trigger a short squeeze
Key facts
- Company
- Tsuruha Holdings Inc.
- Short Interest
- 24.9% of free float
- Current Share Price
- ¥2,800
- Tender Offer Price
- ¥2,900
- Expected Earnings Report Date
- Two days after tender offer closes
- Aeon's Expected Stake Post-Tender
- 50.9%
- One-Year Average Share Price
- ¥2,236.2
Quotes
Nobuhiko Kuramochi
Vice president at Parasol Research Institute
“If earnings turn positive and the stock rises, particularly at a time of reduced liquidity, investors who had been betting on a drop may be forced into costly purchases.”
livemint.com
Takehiko Masuzawa
Head of equity trading at Phillip Securities Japan
“If the company posts really strong results, investors will rush to buy back the shares, and the stock can surge very quickly. If only around 50% of the shares remain in free float, the market impact is naturally going to be significant.”
livemint.com
Rieko Otsuka
Strategist at MCP Asset Management Japan
“The market may already be pricing in the view that there is little chance of any significantly positive surprise.”
livemint.com





