After Sharp and Foxconn agreed on the takeover, I acquired 1000 shares of Sharp thinking it will rise. Interestingly, it fell quite drastically today signifying Japanese sentiments toward the acquisition.
Since I have funds tied up at Mitsui & Co. and Sharp, I’ll probably stop trading for the time being. The next hope is to see what happens on Monday after both companies officially sign the contract this weekend.
I’m less worried about my investment at Mitsui since I bought it at a P/B ratio of 0.58. In the event the company goes bust (which is unlikely), the company’s assets are still enough for me to get back all my investment. On the other hand, Sharp’s P/B ratio was above 7, so if they do go bankrupt, I’d most likely lose all my investments.
I just hope that there are no more surprises regarding the deal but it is consoling knowing Foxconn will have 66% stake in the company. Sharp’s return to power (and my return to profit) will fall on Terry Gou.