Livedoor Shock.

1 week has passed since authorities raided Livedoor,
Suspicion is fraudulent practices and spreading false information about its business practices.

It was on October 2004, when Livedoor Marketing, one of the subsidiary companies of Livedoor, announced to acquire Moneylife.
However, Moneylife was substantially affiliated with Livedoor on June 2004, through several funds.
It means Moneylife was under the control of Livedoor even before the acquisition.
Investors weren't informed so.
They just knew about the acquisition, and bought Moneylife stocks.
But since all the stocks were under the control of Livedoor, "nobody" sold, and the stock prices skyrocketed.

Acquisition was done in stock deal, and it is legal.
Livedoor issued new stocks, and exchanged with Moneylife stocks.
But after exchanging, the fund who got Livedoor stocks sold in market, and returned the profit to Livedoor.

The time when Acquisition of Moneylife was done exactly matches the time when Livedoor had given it's name for new entry in Baseball.

These are their alchemy.
They continued M&A to keep on growing, nevertheless IT companies are unsubstantial.
They thought this "secret formula" will never be known in public.
But they were wrong.

This news shook the economy of Japan.
Nikkei had dropped 6% in just two days, with an across-the-board fall in prices.
Livedoor was well known as one of the winning companies, as well as Horie was well known as a man who rises to greatness in turbulent times of IT.
But our expectations were betrayed.

Of course, Livedoor stocks had dropped too.
It was 696 yen on January 16, but it's 176 yen today.
Even more, it might be unlisted from stock market, which will damage the stockholders even more.

Political world was also shocked.
Koizumi, who supported Horie during the election, said that "Laws must be followed strictly at any times", and also that "I consider this problem as irrelevant from the last election."

Fuji TV canceled business tie-up with Livedoor.
Hieda, the chairman of Fuji TV, said that "We are unrelated to this matter. It was done on 2004, right?"

They have the whole world against them.
Even if they are innocent or not guilty, customers are certainly moving to other companies, and lawsuit by stockholders will be waiting.

Moreover, Livedoor is now under crisis of being acquired by some other companies.
Book-value Per Share (BPS) of Livedoor stocks are 184 yen, while the price is 176 yen, as I said before.
They have a cash of 95.7 Billion yen (apprx. 830 Million US Dollars), while liabilities with interest are just 8.7 Billion yen (apprx. 76 Million US Dollars).
It is a "profitable purchase".

Most probably, Horie traced similar path with Oda Nobunaga or Sakamoto Ryoma, the national heroes of Japan.
They rose to greatness in turbulent times as well, from nothing but merely with their abilities.
They had innovative ideas, vitality, initiatives, and strong will to stand on the top of the world.
They are also misunderstood or hated by majority, who can't follow their ideas.
And finally, since they hurried too much, Oda and Sakamoto were assassinated.

Livedoor shock is purely a good news for me, as always.
It gave me an opportunity to buy most stocks in discounted prices.
I can't thank enough. ^_^

Finally, it is inevitable for Horie to quit president,
since he was arrested yesterday.