Shares of Sanrio Co., the Japanese company behind the iconic Hello Kitty brand, experienced their largest drop since May 2014 after the company announced that President Tomokuni Tsuji and MUFG Bank Ltd. would be selling shares in the open market. The Tokyo-based company saw its stock price fall as much as 17% during early trading, with trading volume surging to more than three times its three-month average, according to Bloomberg data.
Tsuji and MUFG Bank plan to sell approximately 25.9 million shares, with the price to be determined by December 10, as per a filing with Japan’s Finance Ministry.
Jefferies Financial Group analyst Shunsuke Kuriyama explained that the sale is part of an effort to unwind cross-shareholdings, with Sanrio aiming to enhance liquidity. While he expects short-term pressure on the stock, Kuriyama maintained a positive long-term outlook, citing the strength of Sanrio’s character portfolio and market diversification.
Despite the sell-off, Sanrio shares have more than doubled this year, significantly outpacing the 13% gain in the broader Topix index. The company has benefited from successful character development and a rise in tourism to Japan. In fact, Sanrio raised its full-year profit forecast last month, signaling optimism about its ongoing performance.
However, Travis Lundy, an analyst at Quiddity Partners, noted that the sell-off had been anticipated, although the market may not have fully prepared for it. He pointed out that the stock had become “expensive” and was vulnerable to a pullback, especially as momentum-driven investments unwind.
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