Rakuten shares jump 24% on Japan Post, Tencent backing

Rakuten shares jump 24% on Japan Post, Tencent backing

News: Rakuten shares jump 24% on Japan Post, Tencent backing.

TOKYO (Reuters) – Rakuten Inc’s shares rose up to 24% on Monday after the Japanese e-commerce company announced it would raise $ 2.2 billion like this through a sale of stakes in companies like Japan Post and Tencent is the case with Amazon.

Rakuten shares traded 18% at 1,471 yen at 02:28 GMT – the largest increase in 17 years – after previously hitting a daily limit of 1,545 yen. This brings Rakuten’s stock profit close to 30% from Friday and brings its market cap to 2.1 trillion yen ($ 19.4 billion).

The deal is a cash injection for Rakuten’s investments in logistics, where it competes with the newly built internet business of Amazon and SoftBank, and for mobile devices, where it takes over the three established carriers.

“Rakuten could get significant help from the logistics services expert,” Jefferies analyst Hiroko Sato wrote in a note referring to the Japan Post, which operates 24,000 post offices nationwide.

The wireless business “has been a heavy toll on its valuations and earnings for some time, but costs will peak during this period,” Amir Anvarzadeh, analyst at Asymmetric Advisors, wrote in a note.

Investors have also warmed to potential partnerships with backers Tencent, the world’s largest gaming company, and Walmart, the world’s largest retailer, which is also the buyer of the Rakuten stock sale and is waging a digital battle against Amazon in the US.

($ 1 = 109.1600 yen)

Reporting by Sam Nussey and Junko Fujita; Adaptation by Tom Hogue and Muralikumar Anantharaman

Original Source © Reuters

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