TT-448 -- IPO market update, ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, December 2, 2007 Issue No. 448


- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:


************* WHAT DO YOU THINK OF J@PAN INC? *************

We invite you to take a survey and to win a bottle of
premier gin for your troubles. Basically, we're interested
to know what readers think of J@pan Inc magazine, since we
significantly boosted readers and content at the start of
this year. Tell us what you think:


As many readers will know, we like to follow the IPO
market. Largely this is because for most companies, the IPO
is the fitting climax (but only the start of many
challenges to come) to 10 or more years hard work put in by
the founding team and comprises an endorsement of both
their leadership as well as the quality of their business.
Doing an IPO is a coming of age for many Japanese start-ups
and the promise of doing one has a galvanizing effect on its

Over the years, we have successfully identified a number of
companies which have gone on to go public -- and some we
have been lucky enough to come in as investors. One that
readily comes to mind is OK Web, now known as OK Wave,
which listed in 2006. We were their first corporate

However, like many small cap companies that have listed in
the last two years, the OK Wave stock is currently under
water, meaning that it is trading at less than its original
opening price of JPY150,000 per share. It now trades at
around JPY63,000. According to one of our favorite IPO
websites, (another company we were early
investors in, although no longer), this is not an unusual
phenomenon. Apparently as of October 31, 2007, a full 51 of
104 companies that IPO'd this year were trading at prices
below their original listing price.

Because of the high probability of an issue dropping below
its original asking price, it is no wonder that until
September, the bottom had pretty much dropped out of the
IPO market. Individual investors who make up the bulk of
buyers of such stocks would only take so many loss-making
issues before assuming that the something was rotten. And
that something had been the overeagerness of companies and
their underwriters to launch at a high price -- i.e.,
old-fashioned greed.

But things are changing.

[Continued below...]

------- IT and Administrative Staffing Solutions ----------

Whether you are a company needing to hire, or a candidate
looking for a new opportunity, Choose Skillhouse…
you will see the difference!

Skillhouse provides IT and Administrative Staffing Services
via direct placement, long and short term assignments and
right-to-hire options.

Please contact us at if you are
in need of talented human resources or register with us at
if you are interested in new career opportunities.


[...Article continues]

Recently, a new reality seems to have taken place, and as a
result, IPO prices have headed in the opposite direction.
Essentially underwriters are now insisting that companies
drop their launch prices significantly. says
that it reckons most listings occurring recently are
undervalued by as much as 30% to 40%.

With such a large discount, the action is back on again for
investors, and in the case of software maker Ubiquitous,
the first IPO on JASDAQ's new NEO market, the IPO price was
set at a remarkably low JPY100,000. As it turned out there
was a flood of buy orders for the company's stock (90% of
their business is with Nintendo), and it went bid-only,
resulting in an opening price of JPY400,000. If we were the
owners of the company, we'd be kind of mad at the
underwriters (Nomura) for getting such a small portion of
cash into the business and leaving such a lot on the table.
But we suppose that Nomura was thinking of the bigger

Despite the discounting, the Ubiquitous IPO result was
still a reasonable one for the company, though. For many
other companies thinking of doing an IPO the outlook is
much bleaker. As an example, for a company with a market
capitalization on the launch day of JPY10bn (US$90m
approx.), and letting out a typical 10%-20% of their
shares, the current discounting means a full JPY400m to
JPY800m less is taken in proceeds. Considering that the
late-stage institutional investors pretty much want their
money back on the opening day (they might leave their
profits in), this doesn't leave much cash on the table for
the founding team and the company itself.

Indeed, it might be argued that for many CEO's, apart from
the short-term ego-boost, doing an IPO isn't really worth
doing these days. The Ubiquitous CEO for example, held
4.4% of the stock, and his take from the proceeds would
have been no more than JPY10m-20m (our guess), less than a
typical investment banker might make as a bonus. Of course,
on paper he is worth much more, currently around JPY1.4bn,
but as soon as he starts selling some of those shares the
company's share price will tank, as investors look for a
reason (read, trouble in the company) for his selling. It's
a tough catch-22 situation and a good reason for owners to
consider doing a trade sale.

One CEO who won't have a problem with owning too small a
percentage of shares at IPO-time, though, is Eigo Nosaki of
Treasure Factory. Some of our long-term readers may
remember that we covered this company back in the February
2004 issue of Japan Inc. magazine Back
then, Nosaki was 31 and had just become Japan's third
largest recycling chain, with annual sales of JPY1.8bn
(US$16m). Nosaki's company is now slated to go public on
the Mother's market on December 27th. He and his wife
currently control about 84% of the outstanding stock. No
word on what the pricing will be, however, we expect it to
result in a market cap of around JPY10bn. Not bad for a
34-year junk trader.

October was supposedly a good month for IPOs, and market
experts have been saying that maybe the anemic small-cap
market has started to turn around. However, on closer
review, one finds that the high level of funds raised in
October was mainly thanks to the JPY217.6bn (US$1.978bn)
IPO of Sony Financial Holdings. If you take that single
issue out of the mix, the amount raised by the other 11
issues was just JPY11.9bn (US$108m) -- indicating the
continued lack of liquidity for small cap issues. It looks
like there will have to be a few more Ubiquitous-type
issues before individual investors really start to come
back and start boosting prices again.

...The information janitors/


----------------- Travel 67 Photography -----------------

Limited Edition Prints of Japan

Bring the spirit and beauty of Japan into your home
or workplace with a limited edition print.

>From the majestic Mt. Fuji to Okinawa's golden beaches
we provide a selection of fantastic images produced
with archival quality materials.

Looking for that perfect gift, souvenir or work of art,
visit our Prints Gallery at


+++ NEWS

- New platinum-free fuel cell catalyst
- National Chauvinistic Husbands Association
- US military bases hit by workers' strike
- Rakuten and President to set up Taiwan shopping site
- Solar cell output to increase

-> New platinum-free fuel cell catalyst

A development by a consortium from Asahi Kasei, Kyushu
University, and the Noguchi Institute may open the way for
mass production of home ethanol-based fuel cells as an
alternative power source. The group has figured out a way
to replace expensive platinum as a catalyst by using a
copper-based compound reacted with dithiooxamide (rubeanic
acid). The new material is still low in efficiency and
needs to be about 100 times more effective before it can be
practically substituted for platinum. (Source: TT
commentary from, Nov 29, 2007)

-> National Chauvinistic Husbands Association

The advent of a new law back in April this year which
allows women to seek half of their husband's pension has
spawned both a boom in divorces (up 6.1% in April alone) as
well as a reactionary protest group called the National
Chauvinistic Husbands Association (NCHA). The group says
that the "chauvinistic" part of their moniker, "kanpaku" in
Japanese, refers more accurately to the top assistant to
the emperor in days gone by, rather than the current
negative meaning that it has today. Regardless, the
association faces an uphill battle. Apparently 70% of
Japanese women are staying single until 29 or later, versus
75% of them being married at that age twenty years ago, and
95% of all divorce applications come from women. (Source:
TT commentary from, Nov 29, 2007)

-> US military bases hit by workers' strike

Japanese workers from at least 40 US military bases and
related facilities around Japan have gone on strike for a
second time in two weeks. More than 16,000 Japanese workers
in a base-workers union are protesting the Japanese
government's plan to cut their salaries by 10% and benefits
by JPY6,000 per month. The workers look after the
facilities for an estimated 50,000 US troops stationed in
Japan. Japan shells out JPY217.3bn (US$1.98bn) as its
contribution to keep the bases going. (Source: TT
commentary from, Nov 30, 2007)

-> Rakuten and President to set up Taiwan shopping site

Rakuten has teamed up with the operator of 7-Eleven stores
in Taiwan, President Chain Store, to create an online
retailing venture similar to Rakuten's highly successful
business in Japan. The new site will launch in Q2 2008,
and is expected to start with about 3,000 online tenants.
This is the first foreign venture for Rakuten in online
shopping. The Taiwan online shopping market is
estimated to be worth US$5.6bn. (Source: TT commentary
from, Nov 29, 2007)

-> Solar cell output to increase

Sharp has said that it plans to increase the thin-film
solar cell capacity of its Nara plant by 10 times, to meet
soaring demand from customers worldwide. The company will
invest JPY22bn (US$200m) to increase generation capacity
from 15MW to 160MW a year. Thin-film cells are in big
demand because they use far less semiconductor-grade
silicon, which is in short supply. Sharp is also building
a huge new solar cell plant in Sakai, in Western Japan.
When that plant goes online in 2010, it will be the world's
largest, capable of producing 1GW of solar cells annually.
(Source: TT commentary from, Nov 29, 2007)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.


--------------- Fresh Family Social Network ---------------

Japan's First Family Social Network is here!

Are you raising a family in Japan? Do you speak English?
Would you like to meet other English speaking families in
your area? Piqniq is a Social Network Service tailored
specifically for you!

Our concept is "Families helping Families" and we invite
anyone that wants to meet other families, help other
families, or discuss family-related issues pertinent to
life in Japan to come and join the Piqniq today!

For more information:



=> LINC Japan Ltd., an affiliate of the LINC Media group,
is actively marketing the following positions for market
entry customers setting up in Japan, as well as other
employers of bilinguals.


A leading ERP company is looking for a CEO to head up a
substantial planned ramp up in growth of the company in
Japan. The position requires someone with a strong sales
background and strong leadership experience. Fluency in
both English and Japanese is essential.

Expected remuneration is around JPY25m base and
significant incentive bonuses.

Contact for more information.

* Operational Reporting and Analysis Manager - JPY11+m
* Sr. Inside Sales Manager, bilingual - 11-12m
* Enterprise software salesperson, bilingual -- JPY10-12m
* Oracle, open source SQL DBA, bilingual -- JPY6-10m
* Applications support engineer, SQL experience -- JPY6-8m
* Inside sales representative, bilingual -- JPY7-8m
* Jr. System Administrator, bilingual -- JPY6-8m
* Regional Account Manager - JPY6.5-7.5m
* IT software solution sales, bilingual -- JPY6-7m
* IT Administrative Officer, bilingual -- JPY6-7m
* Onsite Project Coordinator - JPY6-7m

* Trilingual Indian male in his late 20's, with Masters of
Finance & Banking. Seeking a sales job at a financial firm.
Very detailed oriented and has solid technical background
and experience in management and client-facing positions
at some of the largest global financial firms. Target
salary is JPY8m+ annually. Available in December.

Interested companies may e-mail resumes to:

============= Back Office Support for SMEs ================

If you have a small 5-10 person office in Japan, chances
are that you are employing both an accountant and an HR
person. Chances are, too, that neither of them are working
at capacity.

LINC Media's BPO Division can help you bring your costs
down and improve head office reporting and interaction in
the process.

We already support many smaller foreign firms in Japan,
hwith a range of bilingual back office services, including
accounting, tax, HR, compliance, and even local

Cost-effective, communicative, global standards. LINC Media
BPO. Contact us at:, or call
(03) 3499-2399.


------- Marcus Evans Events - Supported by J@pan Inc ------

Marcus Evans Events - Supported by J@pan Inc
Date :22nd-23rd January, 2008 Venue: Hilton Tokyo Hotel

-International Tax Management and Transfer Pricing 2008
Date :22nd-23rd January, 2008 Venue: Hilton Tokyo Hotel
Do not miss the comprehensive training by renowned author and
international tax expert, Mr.Robert Feinschreiber of
TransferPricingConsortium, and valuable presentations
from Nera, Kansai Paint, Jones Day and Star Group Ltd.

-Clinical Trial and Drug Development Excellence 2008
Date :23rd-24th January, 2008 Venue: Hilton Tokyo Hotel
The event features case studies and expert presentations by
Taiho Pharmaceutical Co., Pfizer, Eli Lilly, Bayer, AstraZeneca
and Otsuka Pharmaceutical Co.

'J@pan Inc readers are entitled to a 10% discount upon
registration with Ms. Esther Wong.'

For further details and brochures, please contact:
Ms. Esther Wong
Tel No: +603 2723 6736
Fax No: +603 2723 6699
Email add:


----------- Entrepreneur Association of Tokyo -------------

Wednesday, December 5th

Panel Discussion Title: 'Boost Your Sales in 2008!'

Mr. Brian Nelson - President and CEO, ValueCommerce Japan
Mr. Dan Harris - Principal at Market Analytic Partners

This coming December, EA-Tokyo will be inviting two past
speakers and entrepreneurs who are also experts in B2B
sales. They will be sharing some of their experiences and
tips for selling in Japan and then opening up the floor to
questions. If you are interested in boosting your sales in
2008 this is an event you won't want to miss!

Date/Time: Wednesday, December 5, 7:00 pm
Location: Shinsei Bank Head Office 20F
Language: English


IT events announcements are priced at JPY50,000 per week.
For more information, contact sales at



In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to

-> In TT447 we wrote about the rapid take-up of 1-seg
equipped cell phones, and whether the technology comprised
a genuine trend or just a fad.

*** Our reader responded saying: I just wanted to comment
on the 1-seg phones article. It is strange that the article
doesn't really mention that almost every single phone out
there has almost everything that anyone would want. No one
wants to buy last month's model when this month's model is
out and is not much different as far as price goes. Besides
1-seg, the makers include all sorts of other features to
give you far more options than you probably really need --
for example, lots of colors, etc.

So in saying 1-seg is booming, I wonder if your article
really gives a true picture? For example, my
brother-in-law, a normal Japanese guy, bought a 1-seg
option for his DS. He turned it on once, turned it off, and
said he won't bother using it until he is stuck on a train
and wants to watch a sporting event.

So the idea is basically not that you want to watch it
every day on your way to work on the train while the old
man next to you peers over your shoulder, but to have it
handy when your boss makes you work late and you are
missing your favorite sport. Drop the phone on the desk,
and listen in or just watch, while you work.

It's more of an added convenience rather than a fad or a
must-have. Since most phones have it installed, the
apparent big boom or rush in sales mentioned in your
article is a misreading of the market. Since I work with a
lot of people in Europe and the USA, in IT as it relates
to phones, including mobile options, your article hit 3
people who already wrote to me asking what's the deal about
1-seg. I told them the truth, it's a new toy, not big and
nothing more.

*** We respond: Thanks for reading the article and taking
time to respond. We point out that there are still plenty
of phones being sold without 1-seg (more than 60%), and
for those people not valuing the feature, they don't have
to pay for it. We would also point out that in the last few
weeks some amazing new models have appeared on the market,
such as the new Panasonic Viera. These devices
significantly improve the reception quality and make
watching TV on the train a reality. A modest investment in
a polarizing screen film for the phone display will stop
the old geezer next to you getting in a free show.

You're right that it is not clear yet whether 1-seg is here
to stay, however, we suspect that with the current level of
investment being pumped into technology and programming for
the standard, it will soon become a genuine media in its
own right. As 1-seg progresses, we wouldn't be surprised to
see it graduate to regular consumer devices (or at least an
upgraded version), and interactive TV will finally hit the

------ Management Education in English at Globis ----------

Globis International School will offer three MBA-level
courses for the January 2008 term - Critical Thinking,
Marketing and Essentials of Organizational Behavior and
Human Resource Management.
At Globis, students learn about management in a diverse
setting surrounded by people from different industries,
companies and positions.

Globis offers free trial classes throughout December for
prospective students to learn more about a class before
they enroll.
Please visit our website to find out more:

For more information about Globis International School,
including upcoming events and customized corporate training
offerings, visit:


SUBSCRIBERS: 12,112 as of December 02, 2007
(We purge our list regularly.)


Written by: Terrie Lloyd (

HELP: E-mail
with the word 'help' in the subject or body (don't include
the quotes), and you will get back a message with

Send letters (Feedback, Inquiries & Information) to the
editor to

For more information on advertising in this newsletter,

Get Terrie's Take by giving your name and email address at, or go
straight to Mailman at:


Copyright 2007 Japan Inc. Communications Inc.