Japan’s competition regulator is expected to warn brokerage houses that undervaluing initial public offerings (IPOs) on the stock exchange could be a violation of the nation’s antimonopoly law, sources told The Japan Times.
The Japan Fair Trade Commission (JFTC) is planning to issue a report outlining efforts to assist companies newly listed on the Tokyo Stock Exchange to gain financing, the newspaper reported.
Typically, share prices on the first day of trading in Japan exceed IPO prices by wide margins, larger than in the United States and Europe.
Last summer, Nikkei Asia reported the JFTC commenced an investigation over whether securities companies and underwriters are pricing IPO shares fairly.
The action was taken, the report stated, after regulators observed deals where the difference between the per share offer price prior to the listing and opening share prices was substantially larger than in Europe and the US.
While the listing company raises a smaller amount of capital, investors are thrilled with what has been called “first-day pop,” the news outlet reported. Underwriters like the practice because it attracts financial support from investors.
But the investigation by JFTC could allow the underwriters to increase pricing for startups and allow them to raise more money since Japan trails the rest of the world in cultivating tech startups.
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
T-Mobile’s Acquisition of Ka’ena Corporation Receives FCC Approval
Apr 26, 2024 by
CPI
UK Regulator Announces Two New Senior Executive Appointments
Apr 26, 2024 by
CPI
Paramount Global and Skydance Media Near Merger Deal, Eyeing CEO Change
Apr 26, 2024 by
CPI
BHP Unveils £31bn Mining Megamerger Proposal with Anglo American
Apr 25, 2024 by
nhoch@pymnts.com
ByteDance Prefers Shutdown Over Sale of TikTok Amid US Ban Threats
Apr 25, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI