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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.
Nuclear was making a big comeback till Fukushima happened.
Renewable isn't all that great, though. It can't draw enough power. I bet nuclear makes another comeback, but probably not soon enough for Toshiba.
What do short termers have to do with this? First, the company really screwed up last year. I doubt they have many willing long term investors left. Scandals like that hit long time supporters the most.
But that scandal is what is messing with them now. It's a pretty bad confidence hit to their accounting practices to mess up like that. This just makes it far worse. That lack of accounting & transparency confidence severely limits your investor pool. It rules out those big ticket govt backed entities like 401k funds.
And because of the screw up, they're barred from issuing more stock. Even though it's 4+ billion, for a company this size, that is easily solved by stock. But they don't have that option now. BTW, short term investors are the ones which would have bought up that stock issuance.
Or, you could just upgrade the transmission infrastructure like you need to anyway. That way when it's sunny in Las Vegas and cloudy in Seattle you can move those electrons around.
It's also likely that storage technologies will improve enough to where nuclear really isn't needed. It's a useful technology and if we had handled it correctly, would probably account for baseload for a number of generations. But we screwed it up (we being pretty much the entire human race) and it is anything but clear that it will be viable in the next 20-40 years.
Faster! Faster! Faster would be better!
Having "6 transistors" was a selling point back then, apparently, because I remember it well. It was a pocket radio, white and brown, with a big dial for the AM band and small one for the volume. Had an ear phone, which I used to talkbox way before Frampton. He must have seen me. It would be a sad day in Mudville if it went the way of the doodoo.