[Stock Update] Rakuten Inc. (4755): Addressing Huge Debt Pile and Mobile Division Turnaround

Please note: This article is for informational purposes only and is not intended as investment advice. The mention of specific stocks is not a recommendation to buy or sell any securities.

What's Changed for Rakuten?

Back in January, I was pretty bearish on Rakuten, and for good reason. They were dealing with a hefty profit warning for Q4 FY22 and some serious issues in their mobile division. Fast forward to now, and boy, have things shifted a bit.

Read the full analysis here:

[Stock-Analysis] Rakuten (4755 TYO): The Amazon of Japan's Failed Move into Mobile - Updated 2023/01/30

First off, let's talk numbers. Since my last analysis, Rakuten's stock has slipped around 11%, which is pretty stark compared to the NIKKEI 225's nearly 18% rise. That's a significant underperformance, pointing to continued investor skepticism.

Rakuten's decision to sell a sizeable chunk of Rakuten Bank to overseas investors is a major move. This sale is part of their strategy to ease up their debt burden, which is crucial considering they've got a whopping JPY797 billion of debt maturing in the next couple of years. The sale could lighten this load, giving them more breathing room.

Moreover, their losses in the mobile unit have narrowed in Q2. This is a bit of positive news amidst the generally gloomy financial picture.