Japan Stock Market Rocked By Livedoor Raid
Japanese stocks, especially in the Internet sector, took a downward fall today as fears growing from Livedoor security exchange problems led to the rapid sales of Livedoor, Softbank, Yahoo Japan and Rakuten Inc. The Japanese Internet Tech Stock scare follows a raid on Livedoor offices and the home of Livedoor CEO in Tokyo’s Roppongi Hills yesterday.
Livedoor and its eccentric CEO Takafumi Horie have been the talk of Japan after the raid and Horie confirmed that Livedoor is also performing its own internal investigation on the matter of breaking Japanese securities law. Livedoor made its way as one of the most powerful businesses in Japan via Horie’s childlike ruthlessness of acquisitions and rapid growth.
How can one explain Livedoor to the US market? Imagine Yahoo or Google. But instead of Yahoo sending its Yahoo Auto users to a company like Carmax, Livedoor would acquire Carmax and rename it Livedoor Autos. Hence, if you walk down the street of major cities in Japan you may see brick and mortar businesses like Livedoor Insurance or Livedoor Auto, all connected via the uber-popular Livedoor portal.
Therefore, a US equivalent to the raiding of Livedoor by Japanese Securities and Exchange officers may be (and this is just a fictional example) Google, Yahoo, or Microsoft being raided and Bill Gates or Larry Page’s homes being ransacked.
As a result, the Nikkei 225 index plunged 462.08 points, or 2.8 percent, and closed at 15,805.95 points. The loss marks the biggest Nikkei drop since May 10, 2004, when the index lost 554.12 points, or 4.8 percent. The Livedoor ripple effect also resulted in Yahoo Japan Corp. losing 8.4 percent.