Nissan stock jumps as activist investor reportedly buys stake

Investing.com -- Nissan Motor Co., Ltd. (TYO:7201 ) stock jumped 4.5% Friday after Japan's Diamond Online magazine reported that activist investor Oasis Management has acquired a stake in the automaker.

This rise follows a similar surge earlier in the week when a filing revealed that an entity linked to activist Effissimo Capital Management had also invested in the company.

The Diamond Online article, citing an anonymous source, stated that Oasis had purchased shares in Nissan (OTC:NSANY ) before Effissimo, though details regarding the size and timing of the stake remain unclear.

Shareholder activism is on the rise in Japan, with both international and local investors increasingly pressuring companies to enhance corporate governance and optimize capital allocation. This trend has been bolstered by regulatory guidance encouraging such changes.

The news comes amid a challenging period for Nissan, having recently issued a profit warning.

The automaker announced plans to reduce its workforce by 9,000 and cut 20% of its global production capacity in response to declining sales in key markets, including China and the United States.

These headwinds highlight its vulnerability as Japan's third-largest automaker, still reeling from the upheaval surrounding the 2018 ousting of former chairman Carlos Ghosn and a scaled-back alliance with Renault SA (OTC:RNLSY ).

The company also slashed its annual profit forecast by 70%, lowering it to 150 billion yen ($975 million)—the second downgrade this year.

Like other global automakers, Nissan is facing stiff competition in China, where local players like BYD (SZ:002594 ) are rapidly gaining market share with affordable electric and hybrid vehicles featuring cutting-edge technology.

However, Nissan’s more pressing issue may lie in the US market, where its hybrid lineup falls short of competitors. This stands in stark contrast to Toyota (NYSE:TM ), which is experiencing a surge in demand for its gasoline-electric hybrid models.

As part of its restructuring efforts, Nissan has withdrawn its net profit guidance, citing plans to cut costs by 400 billion yen ($2.6 billion) this fiscal year.

Source: Investing.com