The Murakami Fund closes in, and a takeover defence (2001)

Cash as a weakness, and the long-term investment he held to

What this contest exposed was the irony that the financial cushion won at the peak of the bubble could turn straight into a weakness threatening the company’s survival. When market value falls below cash on hand, a company becomes a target for a takeover after that cash. The Murakami Fund’s logic — return idle capital to shareholders — was, from the capital market’s side, a kind of legitimate argument. Even so, Susumu Fujita did not take the road of returning the raised money as demanded and shrinking the business. Rather than liquidate and hand out cash, he bet on raising the next business — media — even while carrying losses. Asked to choose between short-term shareholder returns and long-term business investment, Fujita answered clearly for the latter.

That what saved the crisis was not a hostile defence measure but investment from Hiroshi Mikitani of Rakuten — a fellow entrepreneur — also captures the character of this episode well. Fujita did not forget the debt in later years: in 2023 he invested $71.2M (¥10bn) in Rakuten. And the company’s structure — holding no stable shareholders, its control liable to be swayed by outside large holders — did not vanish in 2001. The tension with shareholders over holding ratios and board independence surfaced again in 2019, when the approval rate for the president’s reappointment plunged to 57.56%. The first confrontation, provoked by an excess of cash, was the starting point of a question that would continue: how a founder faces the capital market.