The hundred-for-one split, and booking share gains as operating profit (2004)

Making the share price became the substance of the business

“Ordinary profit is better than extraordinary profit, and the smaller the float the more easily the price rises” — Miyauchi Ryoji said this in an interview eleven days before his arrest, without any sign of embarrassment. Buy companies with your own shares; push up the price of what you bought by splitting it; book the gain on the sale as operating profit. The circuit keeps turning for as long as the share price keeps rising. The work of manufacturing the share price had become the substance of the business.

What should not be missed is that the man who built the machine called it slash-and-burn farming himself. If we can get a single-A rating and issue plain bonds at just over one percent, he said, we won’t have to do anything reckless — and immediately after he said it, the circuit was stopped from outside. Splitting and gain-taking may have begun as a way of buying time until the operating profits grew up. Before the use of the purchased time was settled, the means had taken up residence in the position of the end.