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Toshiba Is 'Burning Cash At An Alarming Rate' (reuters.com)
bsharma quotes a report from Reuters: Faced with the prospect of a multibillion-dollar write-down that could wipe out its shareholders' equity, Japan's Toshiba is running out of fixes: It is burning cash, cannot issue shares, and has few easy assets left to sell. The Tokyo-based conglomerate, which is still recovering from a $1.3 billion accounting scandal in 2015, dismayed investors and lenders again this week by announcing that cost overruns at a U.S. nuclear business bought only last year meant it could now face a crippling charge against profit. Toshiba says it will be weeks before it can give a final number, but a write-down of the scale expected -- as much as 500 billion yen ($4.3 billion), according to one source close to Toshiba -- would leave the group scrambling to plug the financial hole and keep up hefty investments in the competitive memory chip industry, which generates the bulk of its operating profit. "Toshiba's immediate problem is that it is burning cash at an alarming rate, and this will be more than challenging," said Ken Courtis, chairman of Starfort Investment Holdings. "I see little option but to sell a slew of non-core assets."One source in the semiconductor industry said Toshiba could revive plans to list a slice of the memory chip business, which though highly profitable burns through cash for reinvestment. "Toshiba will probably need to sell 30-40 percent of the NAND business in an IPO to secure enough cash," the source said, adding China's aggressive drive into NAND flash memory chips could make the timing reasonable. The group has already said it could reconsider the "positioning" of its nuclear business, deemed core last year, and has signaled it could trim an 87 percent stake.
> everyone bets on renewable now
A shitload of competition is not a good thing for a company. Much smarter, most of the time, is to set yourself so that no matter who wins the race for whatever is hot, you win your own parallel race. Think of Levi Strauss selling rugged pants during the gold rush, and people getting rich selling shovels and picks, or brokering gold, buying it from the miners and selling it. They win no matter which miner strikes gold.
Solar electricity is really great, except at night time and when the whole area is covered by clouds (check out the national weather radar - weather systems cover half the country for days). Solar electric can produce a lot more during the summer than during the winter, too. Wind power is really cool too. The power of wind is proportional to the CUBE of the velocity. In other words:
1 MPH wind: 1kw (actually zero due to friction)
10 MPH: 1000kw
20 mph 8000kw
30 mph 27000kw
So that 27000kw wind installation will only produce 1000kw quite often. That's less than 4% of it's advertised capacity, and sometimes it'll produce no power at all.
So what do you do when you have lots of cheap energy sometimes, and no energy at all other times, but your customers want a reliable electric service? The optimum setup has three parts. The wind and solar provide cheap, clean energy whenever conditions are right. Natural gas generators throttle up when the sun goes down, it's cloudy, or not very windy. Underneath that, you have a steady minimum load, and nuclear is a perfect fit for that. It's extremely reliable and steady, it can be quite cheap depending on the costs of red tape in that country. It's actually the cleanest reliable power available, despite the two accidents in history. (Other reliable power sources release radiation *on purpose*, during normal daily operation).
So when everybody else is doing wind and solar, they'll all need nuclear or another source when the forecast calls for a cloudy week. It's a good bet on that score.
Unfortunately for them, they bought a nuclear power company run by liars, who cooked the books. And Fukushima happened. Obviously that scared people, regulators and auditors got busy doing their job, then politicians did their thing with pandering to fear, adding duplicative regulations and such, and all of this was expensive for the power companies.