Going public, and putting the debt-free books on display (1985)

The company whose ledger became its product

For most companies, going public is a procedure for raising money. In Kaga Electronics’ case, the disclosure appears to have mattered more than the proceeds. At a talk for investors in February 1986, President Tsukamoto spoke neither about the performance of the semiconductors he sold nor about the size of the market to come, but about the speed of his own turnover: fifteen days of receivables, one month of stock. That a company which had started with no money chose the way it recycles money as its principal selling point tells you what kind of flotation this was.

The effect showed up at once as a schedule pulled forward. A second-section listing that had been aimed at the twentieth anniversary arrived two years early, and eleven years later the company moved to the first section. But money was not the only thing the flotation brought. Once you put your books outside every quarter, the discipline of carrying no debt becomes something outsiders can count too. In the year to March 2019, when interest-bearing debt reached ¥32.5 billion, what the market saw was not the abandonment of that discipline but the price of second place in the industry.