Sharp stock plunges following another atrocious year

Sharp is looking like the next Japanese company to face the axe, with reports that the company is planning a capital reduction and preferred share insurance as part of an ill-timed restructuring plan.

As expected, news that Sharp is preparing to do anything to stay afloat has dropped the stock price by 20 per cent, with more hardship to come. The company is planning a £1.09 billion bailout plan to keep it going throughout the rest of 2015.

Sharp announced a small profit in 2014, implying it had survived its £5 billion operating loss taken from 2012 and 2013, but this year is building up to be another disaster for the LCD panel maker.

It is not all Sharp’s fault, the LCD market for TVs and displays has become relatively non-existent, although it was slow to production of displays for mobiles and tablets.

On top of lacking the speed other panel suppliers offered for mobile devices, Sharp has maintained it is the best in the industry. That doesn’t seem to have won them any business contracts, with LG and Samsung grabbing most of the display deals with Apple and other US brands.

Sharp has stayed away from consortiums like Japan Display, but this new move might mean Sharp is finally ready to work with the Japanese government. It may have to offload some of its divisions like Sony if it wants to stay alive, according to some investors keen to see a better operating profit by Sharp come end of the year.