TeamSpirit Inc. announced a capital reduction as part of its capital policy, then disclosed immediately afterward that it would repurchase approximately ¥600 million worth of its own shares from the founder. The timing and amount of the capital reduction and share repurchase have drawn attention.
Listed company TeamSpirit Inc. announced that it would reduce its stated capital and capital reserve to ensure flexibility and agility in its capital policy, given that retained earnings had remained negative for many years. According to the explanation, the capital reduction itself would not directly affect net assets or shareholders' equity, but questions also arose over whether minority shareholders understood the transaction.
The company subsequently disclosed on 14 January that it had secured distributable amount of ¥600 million. In response, it decided on 21 January to repurchase approximately ¥600 million worth of its own shares from the founder. The repurchase price was ¥482 per share, while the founder was reportedly initially acquired the shares at approximately ¥16 per share.
From shareholders' perspective, many have pointed out that the timing and amount of the share repurchase, which effectively returns the entire distributable amount to the founder, appear unusual. Numerous comments on the message board have questioned the rationale for the capital reduction and whether the matter was discussed when the resolution was passed, as well as the substance of the Board of Directors' review, raising concerns about accountability. Some have also suggested that cash declined, borrowings increased and net assets per share fell after the share repurchase.
These developments have become an ongoing subject of discussion concerning the relationship between the founder's shareholding and the company's capital policy, as well as the protection of minority shareholders' interests. Attention is also focused on future changes in the company's financial position, dividend policy and the timing of the lock-up release.