In my November 2005 post "10 Divided by 1 = 3...Really", I discuss the anomaly whereby unscrupulous managers were using a technical loophole in TSE settlement procedures to generate enormous two-month performance options by effectively ramping shares that recently split, since such shares were not technically available for delivery for 10 weeks following record date.
Embarassed by the abuse and manipulation of shares in Japan, the delay was eliminated beginning in 2006, with "pay date" for the newly issued fungible stock now reduced to 6 days (settlement date + 3).
One would have thought that this would end the party except for the most ardent of die-hard cynics who enjoy surfing the edge of "demonstrably sub-optimal economic behaviour". Whilst only the TSE, Mothers, NASDAQ-Japan, and JASDAQ, through their time-and-sales data, and NSD and various clearing agents really know WHO the villains are here, it is worth highlighting this quarter-ends list of egregiously manipulated share splittees in an attempt to "name and shame" the ultimate perpetrators.
Code--Name---- SplitRatio--%Chg--Vol%ADV
-----------------------------------------------
2450 Ikyu..........3-for-1...15.8%....300%
8571 Nissin........2-for-1...16.7%....295%
8738 Himiwari.....3-for-1...14.4%....740%
3758 Aeria.........3-for-1....8.3%....100%
7873 Arrk..........2-for-1....7.6%....100%
9856 Keiyu.........2-for-1...10.9%....400%
3783 Nano Media..3-for-1...16.6%....210%
2383 Nihon Aim....5-for-1...12.4%....330%
8426 Nissin Srvc...2-for-1....9.7%....150%
2463 Senior Comm.3-for-1....7.2%....100%
9715 Trans Cosmo.2-for-1....9.3%....130%
Though most of these stocks traded multiples of the their average daily volume, one might have expected that they would trade with reduced volume since there are fewer shares available for delivery (until SD+3). One might also expect this to continue until the end of their marginal purchaser's respective valuation period, after which it's every man, hedgefund, or day-trader for themselves.
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