Nihon Falcom share price rises following founder’s death
Earlier this week, it was reported that the founder, chairman and former CEO of Nihon Falcom, Masayuki Kato, passed away on December 15. Since the news was publicized in a notice to shareholders on the 17, Nihon Falcom’s share prices have risen- this is likely due to speculation about the future of the company behind pioneering RPG series like Ys and The Legend of Heroes.
When the news of Kato’s passing was released, Nihon Falcom’s share price steadily climbed from 1,060yen at 2pm on December 17 to 1,180yen on the morning of the following day. At the time of writing, the highest point it reached this week was 1,213 yen on December 19 at 10:30am (JST).
Nihon Falcom’s largest shareholder is Nihon Falcom Holdings K.K, a company believed to have been established by Kato to hold Nihon Falcom shares. The combined total of shares held by Nihon Falcom HD (40.47%) and those in Kato’s own name (11.19%) equals over 50%.
Therefore, the death of Kato has essentially deprived Nihon Falcom of their biggest stable shareholder. Masayuki Kato’s stocks are likely to be inherited by family members. But it is currently unclear whether these inheritors are stable shareholders (it’s possible that they may have to sell some of their inherited shares to pay inheritance tax). These speculations are part of what is driving investors to buy Nihon Falcom shares this week.
Also, prior to the announcement of Kato’s passing, Nihon Falcom’s market cap (i.e. the most recent value of the company’s outstanding shares) was approx. 10.8 billion yen, which has since risen to around 11.8 billion yen (source: Stock Analysis). This market cap could have prompted investors to buy shares in Nihon Falcom while eyeing potential future profits, perhaps with the thinking that another company may try to acquire the game developer and publisher. With the shareholder mix being shaken up, Nihon Falcom’s business management structure and methods might also end up undergoing changes in the future.
At the time of writing, it is currently unclear exactly how Masayuki Kato’s death will impact the company in the long run.
