13 November 2015 by lberuti
TOSH ( Toshiba Corp ) used to be a very “boring” credit. Until mid-2015, it was only moving with market. But that all changed in April this year when the industrial group started to get embroiled in a widening accounting scandal. Things got another a turn for the worst today when reports surfaced in the Japanese press questioning how TOSH booked losses at its nuclear power operations - Westinghouse – over the 2012 and 2013 fiscal years. Even though the company issued a statement to defend its disclosures, the reports definitely undermined further investors’ confidence. An analyst summed up the situation when he wrote “the risk to us is that there was more skeletons in their closet”. TOSH’s stock is now down more than 40% year to date, and its 5 year risk premium has more than quintupled from 50bps at the beginning of the year to 270bps at the close today.