Try to buy a baseball team, set off a financial panic - UPDATED
by Bob Timmermann
If you only check the sports section, you may have missed the problems that have been going in Japan with the demise of Livedoor. Turns out that the brash CEO of the company, Takafumi Horie, decided he wanted to buy the then Kintetsu Buffaloes in 2004 (they merged with Orix last year and became the Orix Buffaloes.)
Here is the relevant part of why this was shady. Under old Tokyo Stock Exchange rules, a stock split did not take effect until stock certificates became available about 50 days after it was announced. The waiting period created a psychological impetus to buy. As of this month, splits take effect on the next trading day.
As a comparison, Microsoft has had nine splits since it started trading in 1987 and none have been bigger than 2-1. By my math, if you owned 10 shares of Microsoft in 1987, you'd have 1920 shares now. If you bought one share of Livedoor in July 2001, you would have had 30,000 shares by August 2004.
Livedoor is now a "Pink Sheet" stock and is listed at $2.00/share.