Going public to build a funding base for the world market (1989)

Matching the speed of investment to the speed of demand

The substance of this decision lay less in the choice of a financing instrument than in setting how much of the demand to go after. Looking at penetration of 15% at home and 2–3% abroad, Teramachi Hiroshi chose to build the factories and the overseas bases first, on the premise that the market would grow thirtyfold, and moved the money for them from the founder’s own pocket and the banks to the equity market. The advice that if you are going to list at all you should go over the counter already assuming the First Section came from the same place: the OTC listing was a waypoint, not a destination.

What Teramachi named first as the effect of going public was not capital but a change on the sales floor — “because the share price was around twenty times, people understood we must be making something very good.” That is the particular condition of a company selling a part that only ever appears inside a machine. That share price, however, drew the founder into share dealings with market operators, and brought about the change of president in January 1997. The First Section listing he had spoken of in 1990 came eleven years later, in February 2001, achieved not by Teramachi Hiroshi, by then chairman, but by President Teramachi Akihiro.