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Yoshikazu Tsugiyama is devastated that his Livedoor shares have nosedived.

He is just one of thousands of individual investors who bet their money on Takafumi Horie’s rising Internet company and are now saddled with shares whose value has fallen by more than 80 percent in little more than a week.

“They’ve turned into trash,” the 29-year-old bar owner, sometimes actor and even less frequent trader said Wednesday. “I’m really worried.”

Horie was arrested Monday on suspicion of securities laws violations, including covering up losses, giving false information about subsidiaries and manipulating stock swaps. He has since resigned as company president and left the board.

The arrest followed a surprise raid by prosecutors a week earlier on Livedoor’s Tokyo headquarters, which stunned the public and unleashed a plunge in the stock market, all of which the media dubbed “Livedoor shock.”

Taking the biggest hit are individual investors like Tsugiyama. Their numbers have been increasing here with the introduction of electronic trading, which now includes the ability to buy and sell on mobile phones.

Stock trading and mutual funds are still not as widespread here as in other industrialized nations. About one-quarter of Japanese households own stocks, compared with half of U.S. households.

Livedoor, founded in 1997, appealed directly and aggressively to individual investors, unusual in Japan. The company kept splitting its stock to make it more affordable, with Horie boasting that even children could invest in Livedoor with their spare change.

The number of individual investors in the company has grown every year to about 220,000 people in a recent count done before the probe began, which reflects a 50 percent rise in one year.

Prior to the investigation, Horie, a 33-year-old geeky college dropout who became a millionaire, had been a hero to Tsugiyama and his generation. Many saw him as the face of new business in Japan.

Livedoor’s Internet portal had been relatively unknown, up against Yahoo! and MSN, but became wildly popular after Horie made a bid for a pro baseball team in 2004 and tried to get control of Fuji Television Network through a takeover of its sister company, Nippon Broadcasting System Inc., a year later. He also ran in the Lower House elections last year.

All those ventures were unsuccessful, but they won Horie a spot in the limelight — which brought greater investment.

Livedoor saw its capital value rocket and took over about 40 companies, branching into software development, securities, publishing, used car sales and marketing.

Bar-owner Tsugiyama, who owns other shares and has made about 3 million yen off the stock market, bought 1,000 Livedoor shares at 324 yen about a year ago because he liked Horie’s pioneering spirit.

The Tokyo market had been on a roll since last year with five-year highs, and relative amateurs like Tsugiyama cashed in. Livedoor shares climbed as high as 800 yen.

But the Jan. 16 raid sent Livedoor stock plummeting as panicked investors stampeded to sell.

The issue has been dropping the maximum allowable in daily trading, shedding more than 80 percent of its value and closing at 113 yen Thursday.

“I had such high hopes for Mr. Horie. I thought he’d make things happen,” Tsugiyama said. “I feel all mixed up. I just wish this were some giant mistake.”

The unusually high number of Livedoor shares — and of individual investors who own them — has worsened the situation. On Wednesday, trading volume of Livedoor shares alone surpassed 420 million.

The Tokyo Stock Exchange, already plagued by capacity problems when stocks were soaring, took the unusual step of limiting trading in Livedoor stock to 90 minutes Wednesday and then lessened it further to only one hour Thursday.

With Horie’s arrest, lawmakers and the public are calling for changes to the regulatory system. Some say Japan needs an autonomous securities watchdog similar to the U.S. Securities and Exchange Commission. The market is now monitored by the Financial Services Agency, a government unit that many say lacks authority and resources.

This week, Kaoru Yosano, the economy and banking minister, promised to beef up market supervision to prevent the public from getting burned on stocks like Livedoor.

“I very much pity those many investors who ended up buying those shares,” he said.

Kazuo Nakamura, a 34-year-old hospital worker, says he’s going to keep his 10 Livedoor shares as a souvenir.

“They serve as a reminder that if you go too far and buy too much, you get hurt,” Nakamura said.

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