Into consumer lending, and out again two years later (2007)

What a price tag of ¥5.28 million showed

Letting go for $44,833 (¥5m) of a company bought for ¥25 billion is less an error of valuation than a case of the premise behind the valuation being rewritten from outside. At the time of purchase Orient Shinpan was earning about ¥1.3 billion a year at the bottom line, and its loan book of ¥80.9 billion was real. What collapsed was the premise that interest already received need not be returned. Change one reading of the rules and not only the value of the asset you bought but the profit and loss of the years before you bought it are rewritten retroactively — GMO verified the nature of the money-lending business in its own accounts.

What the retreat left behind was a discipline, and the structure that made the discipline possible. The promise to hold the maximum committed investment to a third of assets protected operating profit in the core business even when crypto mining produced a special loss of $337.7M (¥37bn) in 2018. And what could be turned into cash at the end of 2007 was the stock of a hosting subsidiary, the stock of a brokerage subsidiary, and a holding in eBank. Having divided the businesses into separate companies with market prices attached is why the parent never had to be sold off in pieces. In this company, dispersion meant something as a cash-flow reality before it meant anything as a philosophy.