The TSE Prime listing, four years and two postponements in the making (2024)

Priced in the trough, earning in the peak

The character of this listing shows in how the four years and the two postponements were used. Both in 2020 and in 2024, what Kioxia stepped back from was a trough in the memory cycle, and the valuation investors put on it had fallen from roughly $14.0B (¥1.5tn) to about $5.3B (¥800bn). Since a pure-play maker’s price moves with the market it sells into, a company that avoided the trough before going to the capital market can be read as a private-equity exit opened by waiting for the terms to fall into place. Whether that waiting was right all the way to the end was, however, partly decided by the wave of demand that arrived after the listing.

The irony is that a listing twice withdrawn in a trough bore its fruit on the peak of AI demand. Little more than a year after listing, Kioxia posted a record operating profit of $5.5B (¥870bn) and its share price stood at several times the offer price. That harvest became the money with which the Bain that had waited eight years recovered its investment and withdrew — and what remained, once the owner of the capital had gone, was Toshiba, the company that invented this business and let it go. The very swing of pricing in the trough and earning in the peak traces the outline of a business that does nothing but NAND.