Toshiba Corporation shareholder’s watched helplessly as shares of the company’s stock tumbled to a whopping 12% on the stock exchange. This happened after the company stated that it might need to take out a loan valued at a few billion dollars.
However, this announcement did not sit well with investors as they ran for cover with revived worries of the company’s book-keeping practices.
The Japanese company said the cost of the USA controlled ventures are currently overwhelming the companies asset and may need a huge write off in order stay afloat.
Toshiba ‘s declaration came after a lawsuit involving its Westinghouse Electric Company was ordered to pay out a large sum of money to CB&I who stated they expects to receive only $161 million from the court ordered settlement.
Tom O’Sullivan, the author of Vitality Consultancy state that the current situation will become an extra problem for Toshiba ad its shareholders. The debilitating effect that the brand will suffer should of global proportion. This he argued will serve as a referendum on the company as many investors have now lost interest and trust in the organization.
O’Sullivan said that a financial report that was released in December 2015 highlights several inconsistencies in the company’s expenses. It also highlighted that the administration handling of the companies asset is weak.
CEO of Toshiba, Satoshi Tsunakawa, is the proud recipient of the mess left behind by his predecessor who had left a mountain of problems for the new CEO to tidy up. Tsunakawa took over as head of the company back in June of this year.
Satoshi Tsunakawa affirmed that the company would dig deep to keep the Toshiba from going under – failure is not an option on his watch – he assured investors at a press conference.
The valued of Toshiba stocks had decreased in value as shareholders are sitting nervously on the edge of their seats. But one thing is sure in this huge mess, Toshiba has to act fast in order to save the company from falling off the face of the Earth.