Buying Coincheck, hit by the NEM theft, for ¥3.6bn (2018)

A deal that worked only at the point where the price fell

A price of ¥3.6 billion is not one that would attach, in ordinary times, to a company said to have earned more than ¥100 billion in operating profit in the preceding year. What pushed the price that far down was the theft of about ¥58 billion of NEM, the business improvement order, and the counterparty’s inability to continue on its own. Six months after proclaiming a “second founding,” Matsumoto closed the negotiation before those circumstances could fade. What he decided was not whether to enter, but when to buy.

Buying cheaply and using it well, however, are two different things. In the first year after the acquisition the crypto-asset business showed a segment loss of ¥1.73 billion, as the costs of governance and security needed to obtain registration came first. The ¥20.8 billion of operating revenue in the year to March 2021 was likewise carried by a surge in prices, and fell to ¥7.6 billion two years later. What Monex Group acquired was not a stable source of earnings but a business whose revenue rises and falls with the market.