Rakuten Group Plans Share Sale: In a strategic move to enhance its financial position, Japan’s Rakuten Group (4755.T) announced on Wednesday its intention to sell 25.5 million shares in Rakuten Bank (5838.T) in the offshore market. This move marks the latest effort by Rakuten to fortify its financial standing.
The shares offered for sale represent just under 15% of Rakuten Group’s stake in Rakuten Bank, as per data from LSEG. The company outlined its plan to utilize the proceeds from the share sale for the early repayment of bonds, aligning with its commitment to reducing interest-bearing debt. At the closing price on Wednesday, the stake is estimated to be worth around 69.8 billion yen ($474.70 million).
Rakuten Group faces a substantial challenge with nearly 800 billion yen ($5.44 billion) in bond redemptions scheduled before the end of 2025, according to company documents. The financial pressure is a consequence of the extensive investment in expanding its mobile network since 2020.
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Rakuten Bank went public in April of this year, with Rakuten Group raising 72 billion yen and subsequently reducing its holding to 63.3%. Despite the share sale, Rakuten Bank will continue to be a consolidated subsidiary of Rakuten Group. The share price will be determined through a book building period scheduled between December 6 and 7, as outlined in a separate statement by Rakuten Bank.
This strategic move to divest a portion of its stake in Rakuten Bank reflects Rakuten Group’s proactive approach to managing its financial obligations and optimizing its capital structure. As the company navigates the evolving landscape of e-commerce and financial services, these financial maneuvers are crucial in maintaining a robust and agile financial foundation.
Our Reader’s Queries
Why is Rakuten stock so cheap?
The decline in Rakuten’s stock can be attributed to two factors: a bear-market for tech stocks and profit losses in its mobile segment. Despite its previous success, the company has faced challenges in these areas, leading to a decrease in its stock value. However, with strategic planning and a focus on innovation, Rakuten has the potential to bounce back and regain its position in the market.
What is the revenue of Rakuten group in USD?
Rakuten’s latest financial reports reveal that the company’s current revenue (TTM) stands at $14.77 B. However, in 2022, the company’s revenue decreased to $14.49 B, as compared to the previous year’s revenue of $15.00 B. Revenue is the total income generated by a company through the sale of goods or services.
What company did Rakuten buy out?
Rakuten made a strategic move in September 2014 by acquiring Ebates for a whopping $1 billion. This acquisition allowed Rakuten to expand its online shopping membership rewards program in several countries including Canada, China, Russia, South Korea, and the United States.
What does Rakuten group do?
Rakuten Group boasts over 70 businesses that cover a wide spectrum of online and offline services. These include e-commerce, travel, digital content, fintech (such as credit cards, banking, securities, insurance, electronic money, and smartphone app payments), communications (including a mobile carrier service), and professional sports. Our diverse range of offerings ensures that we cater to the needs of our customers in various industries.