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TEPCO Shares Suspended After Nationalization Report; Billions Of Capital In Flux

Tyler Durden's picture




 

As reported earlier on Zero Hedge, the next step for TEPCO is most likely nationalization. While this is likely great for bondholders (if an American bailout model is consumed where there is no creditor impairment), it is not that hot for shareholders, who may lose most/all of their investment. Not surprisingly, we have just heard from Reuters that TEPCO shares are now suspended following the earlier nationalization reports: "Tokyo Electric shares were untraded due to a glut
of sell orders at 626 yen, down 10 percent from Monday's close. The
stock has lost 70 percent since the earthquake and tsunami.
"
And so, the rules change in the middle of the game once again. Only this time it was visible from a mile away. In the meantime, those who are long TEPCO puts may experience a Chinese reverse-merger fraud moment, as the stock gets a T-12 halt and reopens sometime in 3 years on the Pink Sheets. And, incidentally, those who are long are some of the biggest financial entities in Japan including  Dai Ichi Life Insurance, Nippon Life Insurance, Tokyo Metropolitan, Mizuho, Sumitomo, Bank of Tokyo.

And the main holders who may soon be looking at a big fat doughnut.

 

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Mon, 03/28/2011 - 20:23 | 1110859 Monkey Craig
Monkey Craig's picture

Collateral damage. I'm watching the financial sector in Japan, plus the city of Tokyo. If real estate values drop, then we might see major drama.

Mon, 03/28/2011 - 21:02 | 1110995 Nobody special
Nobody special's picture

Pretty frickin obvious if you ask me.  They're stock is going to be negative based on their success rate.  Who will fight this mess then?  The only way to keep TEPCO from outright collapse is nationalization.

Mon, 03/28/2011 - 20:23 | 1110860 Trimmed Hedge
Trimmed Hedge's picture

3 years is a long time to wait to BTFD....

Mon, 03/28/2011 - 20:25 | 1110862 Id fight Gandhi
Id fight Gandhi's picture

Nikkei no likey

Mon, 03/28/2011 - 21:12 | 1111033 Mae Kadoodie
Mae Kadoodie's picture

Tora! Tora !Tora!

Mon, 03/28/2011 - 20:24 | 1110866 dark pools of soros
dark pools of soros's picture

They just need to rent Paulson for his act in their congress for a full bailout

Mon, 03/28/2011 - 20:31 | 1110888 Dr. Porkchop
Dr. Porkchop's picture

Hank! Dust off the suicide vest and call Timmah..  they need you in Japan!!

Mon, 03/28/2011 - 20:39 | 1110922 Howard_Beale
Howard_Beale's picture

Hank just needs his kneepads.

Mon, 03/28/2011 - 21:30 | 1111108 f16hoser
f16hoser's picture

GEEEZZZZZ, I just had a visulization of Hank going down on Pelosi for 900 Billion. How do you say TARP in Japanese?

 

All kidding aside, my prayers to the Japanese people.

Mon, 03/28/2011 - 21:32 | 1111121 Dr. Porkchop
Dr. Porkchop's picture

CARP? Or is it Koi?

Tue, 03/29/2011 - 10:20 | 1112559 Tenma13
Tenma13's picture

???

Tue, 03/29/2011 - 10:23 | 1112569 Tenma13
Tenma13's picture

wtf no Japanese text ? 

Mon, 03/28/2011 - 20:24 | 1110867 chump666
chump666's picture

Share meltdown...that crazy Japan govt nationalise, they will have to repatriate like crazy. 

 

Mon, 03/28/2011 - 20:24 | 1110868 BigJim
BigJim's picture

And, incidentally, those who are long are some of the biggest financial entities in Japan including  Dai Ichi Life Insurance, Nippon Life Insurance, Tokyo Metropolitan, Mizuho, Sumitomo, Bank of Tokyo.

So what? They'll be treated as secured creditors.

Mon, 03/28/2011 - 20:29 | 1110882 taraxias
taraxias's picture

++++

TBTF, they have been for 20 years now, why would anything change now.

Mon, 03/28/2011 - 20:25 | 1110871 buzzsaw99
buzzsaw99's picture

Bonus time!

Mon, 03/28/2011 - 20:51 | 1110966 Id fight Gandhi
Id fight Gandhi's picture

Tepco execs home sick with a bailout.

Mon, 03/28/2011 - 20:25 | 1110873 Cdad
Cdad's picture

Tyler,

I tip my hat, man.  You are the one guy who, day in and day, out paints the clearest picture of the disease running wild through our new, fake financial world...moral hazard.

Even the least informed, Dancing with the Stars watching, Average Joe American understands this intuitively.  But for some reason, Washington DC, Europe, and Japan simply have no clue how their actions destroy market credibility.  And as little as they know about moral hazard, they know even less about the consequences of maintaining this plague.

But there you are, plugging away, with each opportunity, painting the clearest picture of it.  And I thank you for it.

It is now official...post earthquake, Japan is now entirely FUBAR.

Cdad

 

Mon, 03/28/2011 - 20:39 | 1110916 FortyTwoIsTheAnswer
FortyTwoIsTheAnswer's picture

It's interesting that Cdad and other people make the assumption that our leaders don't understand the results of their actions, re: "..have no clue how their actions destroy market credibility". They know exactly what they are doing and which masters they are serving.

 

Time to wake up to the fact that there is a reason to how/why things happen. It's not an accident and it's not because people are clueless.

Mon, 03/28/2011 - 20:53 | 1110969 CU1981
CU1981's picture

Chaos - by definition: is uncontrollable.

Mon, 03/28/2011 - 20:55 | 1110979 Cdad
Cdad's picture


First off, anyone with a name as stupid as FortyTwoIsTheAnswer is suspect...but I'll give you one chance.

I did not use the word "accident."  You inserted that word.  And while I did use the word "clueless", the important context came within the following sentence which drew attention to the consequences of continuing to bail out the losers.  The difference between us?  Timeframe.

Yes, you see what the bankers who continue to rape the system fail to understand is...revolution.  That is what America is heading for, in my opinion.  The normal channels are clogged with short sighted criminal syndicate Wall Street bankers...but if you had ever even read two of my posts...you would have known this, of course.

So ball in your court.  Go ahead and prove to everyone here that you are a Chinese communist fuckstick working for sticky rice balls, tasked with trying to fuck up everything that anyone says...or prove me wrong.  Either way.

Mon, 03/28/2011 - 21:13 | 1111040 ExpendableOne
ExpendableOne's picture

42 IS the answer.  You are obviously not a fan of Douglas Adams.  When TSHTF, don't forget your towell or peril sinsitive glasses.

Mon, 03/28/2011 - 21:42 | 1111172 Fearless Rick
Fearless Rick's picture

Cdad, I don't think there's going to be a revolution, at least not the bloody sort. Rather, I believe what I see happening day in and day out on the streets and in the stores. Any opportunity to cheat the system is taken by small businesses sick and tired of paying all the bills and keeping nothing for themselves.

Cash is being stripped out by plumbers, restaurants, small retailers, landscapers, etc. who simply cannot pay all their bills and their taxes. It's just too much, so the logical thing to do is to stiff the easiest one - the tax man, and it's done mostly by underreporting of income, as has been done for ages.

During the period of Prohibition, the underground economy was larger than the "official" economy. Govt. didn't have control and it's about to lose it again. The American people aren't the brightest bulbs, but some are, and they are screwing the feds and the states every chance they get.

Mon, 03/28/2011 - 20:49 | 1110962 tom a taxpayer
tom a taxpayer's picture

Cdad - I wonder if Tyler and Marla could dance on Dancing with the Stars, maybe that could open up a whole new audience for Zerohedge and its educational mission.

Mon, 03/28/2011 - 20:59 | 1110988 Cdad
Cdad's picture

I hear ya Tom...and maybe so.  I have never seen the show so I cannot actually say.

However, I think what Tyler and Marla need to work on right now is weeding out dipshits [based on the geography of their IPs] so that the current audience of ZH [the non communists members] could effectively communicate and thus be better in a position to assist in advancing the ZH cause...but that is just me and two fucking giant martinis talking...so go ahead and dismiss me now if you likee.

Mon, 03/28/2011 - 20:26 | 1110874 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

GDP = C + I + G + Net Exports!

Mon, 03/28/2011 - 20:27 | 1110881 Sqworl
Sqworl's picture

Vote for Petra Nencova on DWS by calling 800-868-3404..thank you..

Mon, 03/28/2011 - 20:29 | 1110883 ragedmaximus
ragedmaximus's picture

 namechange to   TAPPEDCO

Mon, 03/28/2011 - 20:35 | 1110906 QQQBall
QQQBall's picture

No DedCo sounds better

Mon, 03/28/2011 - 21:28 | 1111100 espirit
espirit's picture

NuKuFuKu?

Mon, 03/28/2011 - 20:32 | 1110890 etudiant
etudiant's picture

A country of old people invested in TEPCO as a safe source of income in retirement. Poor Japanese.

Mon, 03/28/2011 - 20:34 | 1110895 bob_dabolina
bob_dabolina's picture

Who is going to nationalize Japan?

Or are 5 reactors melting down not that big of a deal on a relatively small island?

Mon, 03/28/2011 - 20:38 | 1110902 taraxias
taraxias's picture

Who?

It's owners. The USA.

Let's face it, Japan has been nothing more than a US protectorate since the end of WWII. Willingly too.

P.S. Now, please don't ask me who's going to nationalize the US. The answer to that question is obvious if your ears are good enough to pick up that humming sound of the ChairSatan's heidelbergs.

Mon, 03/28/2011 - 21:59 | 1111227 tbd108
tbd108's picture

12 million starved to death mainly from wolfpack style submarine warfare (just like those nasty Germans!). Millions more dead from firebombing and a couple doses of nuclear style death. Roman Empire style mass terrorism so they stop getting uppity and thinking they are qualified to run their own affairs (not to mention horning in on the USA and Great Britain milking China dry which I mention in case you think I am actually favoring the Japanese). I bet that you'd be more than a little "willing" if you went through that.

Mon, 03/28/2011 - 20:44 | 1110933 chump666
chump666's picture

straight down short on the AUD to the 50 or 100 mA

Mon, 03/28/2011 - 20:36 | 1110901 RobotTrader
RobotTrader's picture

No worries.  Any fund with a position in TEPCO will simply sell whatever crumbs are left, then take that money, lever it up with a Bank of America Prime Brokerage margin account, and find the next "LULU" or "PCLN" in order to Riverboat their way back to "even".

Any wonder why the more black swans emerge, the crazy cult stocks go up even higher?

Virtually everybody who has had a big loss on something like TEPCO is now more determined to turn some of his portfolio over to a 19-year old, Monster Energy-swilling, mo-mo trader with specific instructions:

"You have 90 days to use this money to gun some mo-mo stocks and get my portfolio caught up.  If you fail, then you are out of a job.  If you are successful, then you get a $25k bonus."

LOL...

Lots of guys making big bets on small screamers like Alcatel-Lucent

Mon, 03/28/2011 - 20:39 | 1110920 bob_dabolina
bob_dabolina's picture

I've banged 3 of those chicks...

They're not much to brag about.

Mon, 03/28/2011 - 20:43 | 1110939 BigJim
BigJim's picture

I'm sure they speak very highly of you, Bob ;)

Mon, 03/28/2011 - 20:52 | 1110965 bob_dabolina
bob_dabolina's picture

They were cheap even by Vegas standards.

Mon, 03/28/2011 - 20:58 | 1110984 duncecap rack
duncecap rack's picture

While we are on the topic of hot chicks. Where the hell is money mcbags these days? With the world so fucked up I could use a good laugh.

Mon, 03/28/2011 - 21:09 | 1111027 StychoKiller
StychoKiller's picture

Goto:  http://whengeniusprevailed.com/

For a super-sized McBags & Fries!

Mon, 03/28/2011 - 21:00 | 1110908 Howard_Beale
Howard_Beale's picture

Max Keiser is on Al Jazeera right now talking about bailouts and the European situation...they gave him a lot of face time.

Mon, 03/28/2011 - 20:39 | 1110923 tom a taxpayer
tom a taxpayer's picture

This is the time when the switch is flipped from privatizing gain to socializing losses.

Mon, 03/28/2011 - 20:56 | 1110982 Howard_Beale
Howard_Beale's picture

You mean it stopped since the first Maiden Lane was established for Bear in 2008? It's been going three years straight without a hitch all over the globe.

Tue, 03/29/2011 - 08:53 | 1112192 Urban Redneck
Urban Redneck's picture

Wash, rinse, repeat

Maiden Lane has existed on licensed banks' balance sheets since before the turn of the century, only the suffix changes.

The story remains the same. 

 

Mon, 03/28/2011 - 20:41 | 1110930 suteibu
suteibu's picture

Nikkei spins it another way.

Tepco Ask-Only On Plutonium Leak Jitters

Shares in Tokyo Electric Power Co. (9501) opened ask-only Tuesday, after the utility said Monday that plutonium was detected in soil on the premises of the Fukushima Daiichi nuclear plant.

Investors are selling the stock on concern that the highly poisonous substance came from the damaged reactors.

They added this at the end.

A local media report before the bell said sources close to the government suggested Tepco may be nationalized to help the firm deal with the massive financial burden it will bear over compensation for those affected by the plant troubles.

Investors responded negatively to the report.

Mon, 03/28/2011 - 20:46 | 1110942 chump666
chump666's picture

apparently at 5 different locations..indicating a meltdown is happening or has happened

Mon, 03/28/2011 - 20:49 | 1110955 BigJim
BigJim's picture

That's a good point! How do we KNOW that all that radiation around the plant actually came from the reactors, rather than (say) just 'natural' radiation washed ashore with the Tsunami? And it filled up all those weird toruses, and is only NOW beginning to leak out?

Paging Trav, paging Trav....

Mon, 03/28/2011 - 21:00 | 1110987 Howard_Beale
Howard_Beale's picture

Please don't page him. Hopefully he took his lithium and is resting in his mother's basement.

Mon, 03/28/2011 - 21:08 | 1111020 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

That's what I do after my spanking.

Mon, 03/28/2011 - 21:05 | 1111012 duncecap rack
duncecap rack's picture

He must be at a mensa meeting. Haven't heard anything from him in a while.

Mon, 03/28/2011 - 21:09 | 1111023 Jim in MN
Jim in MN's picture

Investors responded negatively to the report.

I believe that is scientifically known as 'in situ defecation'

Tue, 03/29/2011 - 00:21 | 1111643 davepowers
davepowers's picture

Stock Boy takes a poop

Tue, 03/29/2011 - 06:14 | 1110952 Zero Govt
Zero Govt's picture

Oh Great, a Tepco bailout! Another zombie retard corporation to add to Japans army of walking dead... is any diseased dinosaur allowed to die in Japan?   ...any wonder why the Japs have had 20 years of economic stagnation??

Answers on a Postcard to: 'Add Tepco to the List' Campaign, Zombies R Us Dept., Ministry for the Walking Economic Dead, Japanese-Keynsian Govt, Tokyo, Postcode: NUKE US 

 

Mon, 03/28/2011 - 20:48 | 1110954 disabledvet
disabledvet's picture

i need Banzai to explain "the intricacies of the bow."  Clearly "this is beyond the hello bow."  Is it "the Emperor wishes to see you now bow" though?  Or is there a "you wanna a piece of this!" bow?

Mon, 03/28/2011 - 20:55 | 1110961 suteibu
suteibu's picture

Different meanings for the one being bowed to.  Pretty much a "kiss my ass" to all those behind.

Speaking, of course, only about the politicians, bureaucrats, and zaibatsu.

Mon, 03/28/2011 - 21:25 | 1111084 Howard_Beale
Howard_Beale's picture

This item was just added to the Banzai store at Zazzle:

Abunai! Maneki Neko kitty flipping the bird, wearing a gas mask and holding the TEPCO bag:

http://www.zazzle.com/abunai_watch_out_tshirt-235258325379541784

Mon, 03/28/2011 - 21:29 | 1111114 suteibu
suteibu's picture

Sad.  Funny.  Strangely appropriate all at once.

Mon, 03/28/2011 - 20:58 | 1110985 Plumplechook
Plumplechook's picture

Sorry - but at this stage I don't really give a shit about the status of TEPCO share holders.  Fuck them and fuck their incompetently run investment.

Mon, 03/28/2011 - 21:04 | 1110991 pauldia
pauldia's picture

INET, George Soros second Brenton Woods meeting in April!!!

 

Shock admission by author of doctrine
used by White House to justify attacks

--WND

 

Mon, 03/28/2011 - 21:04 | 1111004 Vuvuzela
Vuvuzela's picture

Thye are calling in the tanks, russian tanks lol

http://rense.com/general93/tanks.htm

Mon, 03/28/2011 - 21:55 | 1111213 whoopsing
whoopsing's picture

That's some eyebrow raising shit there

Mon, 03/28/2011 - 21:07 | 1111014 sangell
sangell's picture

Who are the big construction and cement makers in Japan? As Jim Cramer put a buy on them yet?

Mon, 03/28/2011 - 21:09 | 1111015 sangell
sangell's picture

Sorry, computer has been Fukushimaed.

Mon, 03/28/2011 - 21:07 | 1111017 Jim in MN
Jim in MN's picture

Let the games (financial and other) begin, er, continue, er, feed back into a screaming crescendo of black banshee swans:

"On Monday, The power company scaled back its operation to cool the No. 2 reactor, injecting 7 tons per hour, reduced from 16. The reactor's temperature rose by more than 20 degrees Celsius."

Mon, 03/28/2011 - 21:17 | 1111051 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

Many of you have cold war fallout shelters hidden among neighboring homes. At one point building codes in some cities required them. Lead lined with filtered hand crank ventilation systems.

It might be a good time to talk to your local historians or librarians. Find out where the nearest ones are and make a reservation.

http://www.nuclead.com/leadproducts.html

Mon, 03/28/2011 - 21:20 | 1111065 sangell
sangell's picture

What a dilemma Tepco has here. NHK says the 'trench' is within centimeters of overflowing so they've put Jersey walls and sandbags around the top but they are losing 9 tons per hour of cooling capacity from the reduced water input. The 7 tons is the evaporation rate. Only its not steady state since there is a leak someplace. Sounds like a decision for the president of Tepco to make only no one has seen him lately!

Mon, 03/28/2011 - 21:09 | 1111024 suteibu
suteibu's picture

In addition to those insurance companies, the Development Bank of Japan is a major lender to Tepco and all utilities.

What's really interesting is that the DBJ was privatized several years ago.  However, the government of Japan remains the only shareholder in the "private" bank. 

Development Bank of Japan (DBJ)  has provided 1.4 trillion yen (roughly 17.2billion US$) to 9 major electric power companies in Japan at the end of March 2010. As one third of electric energy in Japan coming from nuclear power plants, it means almost 470 billion yen (5.7 billion us$) of DBJ’s money has been spent for constructions and operations of nuclear power plants around Japan. Therefore, we can call DBJ “Japan’s No1 nuclear bank”.

According to financial statements of 9 major electric power companies in Japan including struggling Tokyo Electric Power Company(TEPCO), total amounts of their long-term lending are 4.7 trillion yen (roughly 60.2 billion us$). In addition, they have issued corporate bonds over 12 trillions yen, but major holders of those huge bonds are not disclosed in the financial statements of electric power companies.

 


Mon, 03/28/2011 - 21:13 | 1111037 max2205
max2205's picture

That tree fell in the forest. They heard it

Mon, 03/28/2011 - 21:16 | 1111047 Max Cynical
Max Cynical's picture

Somewhat OT...I had lunch with my father today to talk about my recent decision to relocate to Montana (from Orange County) and he says there's nothing to be worried about. He's lost half his net worth twice in the market and both times he's earned it back...So, that proves that everything is fine and I'm just acting like a lunatic...carry on.

Mon, 03/28/2011 - 21:19 | 1111060 Max Cynical
Max Cynical's picture

I have to say one more thing...after lunch today, I'm absolutely convinced that most people just are not paying attention...

Mon, 03/28/2011 - 22:59 | 1111422 A Lunatic
A Lunatic's picture

What part of mt you headed for?

Mon, 03/28/2011 - 21:19 | 1111059 Caviar Emptor
Caviar Emptor's picture

Nobody should be shocked. This is just a further step along the trend toward governments everywhere controlling all aspects of the economy. At least this is open book nationalization and not the under the table kind like AIG, GM, C, BAC, BSC, LEH, MER

Mon, 03/28/2011 - 21:22 | 1111067 suteibu
suteibu's picture

Major Firms With Large Tepco Shareholdings

Company Holdings (Ymn)

Maeda 5,648

Mitsubishi Electric 4,796

Furukawa Electric 3,362

Tokyo Energy & Systems 3,318

Japan Petroleum Exploration 3,241

JR East 2,891

Kajima 2,747

Shimizu 2,656

Mitsubishi Estate 2,612

Taisei 2,436

JR Tokai 2,115

Meidensha 1,697

Inpex 1,423

Fujikura 1,171

Mon, 03/28/2011 - 21:22 | 1111070 knotty
knotty's picture

Not suspended.
TSE sets daily price limits for each stock, TEPCO limit today based on aY700 close last night is Y150, so will be limit down today at Y550.
Govt isn’t nationalizing TEPCO, Edano said at a news conference, in response to a Yomiuri article that the govt may buy a majority stake.
Yet.

Mon, 03/28/2011 - 21:22 | 1111072 treemagnet
treemagnet's picture

Could this be the straw that breaks the camel's back?  I mean, its not like they can take body blow after body blow and not puke at some point.

Mon, 03/28/2011 - 21:25 | 1111089 bugs_
bugs_'s picture

too big to puke

Mon, 03/28/2011 - 21:23 | 1111083 f16hoser
f16hoser's picture

I hope Buffet was invested and get's his ass handed to him!!!!!!!!!!!

Mon, 03/28/2011 - 21:38 | 1111150 suteibu
suteibu's picture

From WSJ


Tepco retains support as a pillar of Japan's business community. Lorne Steinberg, who runs a Canada-based fund with a quarter of its assets in Japan, said the company's shareholders include powerful institutions that would be loath to see their shares wiped out. Foreign investors, including major names such as Vanguard, owned slightly under 18% of Tepco shares as of March 2010.

"Virtually everybody has a strong stake in seeing it successful," Mr. Steinberg said.

No problem, the Japanese will just pay for it with higher debt and taxes.  Those companies will barely notice.

Mon, 03/28/2011 - 22:25 | 1111298 Fearless Rick
Fearless Rick's picture

I love the language:

"powerful institutions that would be loath to see their shares wiped out."

That's like me telling the guy who's about to kick my ass for screwing his girlfriend, "I am loathe to having my teeth smashed by your burly fists."

Yeah, gonna leave a mark. Maybe more than one.

Mon, 03/28/2011 - 21:40 | 1111163 suteibu
Tue, 03/29/2011 - 06:49 | 1111970 tek77blu
tek77blu's picture

Great Interview of Jim Willie on this Japanese Crisis and the impacts it will have on gold and especially silver: http://www.contraryinvestorscafe.com/jim-willie-radio/

Do NOT follow this link or you will be banned from the site!