Tokyo Exchange Closes Early Amid Investor Panic
In three days, the Tokyo Stock Exchange has shed roughly $300 billion in shareholder value. Livedoor alone has lost $1.8 billion in market capitalization.
Japan's Yomiuri newspaper reported that Livedoor is suspected of falsifying its financial reports for fiscal 2004 to make it appear that the company had a profit of 1.4 billion yen when in fact, it had suffered a 1 billion-yen loss.
1.4 billion yen - minus 1 billion yen is about $ 21 million (with an m). How can exposure of $ 21 million of accounting fraud case $300 Billion (with a B) to disappear ? Herd mentality ? Panic ? First time a Japanese CEO has lost his Louis Vuitton t-shirt ? Major typo ?
Also how in the name of irrational exuberance did a firm which (falsely?) claimed profits of about $ 12.5 million manage to have market capitalisation of more than $1.8 billion ???
It's weird enough to make me blog about economics and that's weird.