Earlier today, it was discovered that Konami had delisted itself from the New York Stock Exchange (NYSE). While it came as a surprise to many of us, it was explained to us that the delisting on NYSE is actually an older announcement dating back to April 1st.
Addressing concerns one might have regarding the delisting, Konami provided reasoning behind the move:
The Company listed its ADSs on the NYSE in September 2002 mainly to diversify its opportunities for fund-raising and to raise the visibility of the KONAMI brand. Since then, the Company has made efforts to enhance disclosures for shareholders and investors with the goal of deepening their understanding of the Company, in addition to complying with the disclosure requirements of U.S. securities laws and regulations, providing consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), and establishing internal controls in accordance with the Sarbanes-Oxley Act of 2002.
Meanwhile, the external environment has significantly changed as indicated by the increases in trading volume of Japanese stocks through stock exchanges in Japan by overseas investors due to the internationalization of the Japanese financial and capital markets, as well as the narrowing of the gap between U.S. and Japanese disclosure standards with respect to financial reporting due to a series of amendments to Japanese laws and regulations and accounting standards.
While the Company believes the initial objectives of the U.S. ADS listing were mainly achieved, it has judged that the continued listing on the NYSE is not economically justified, taking into account the market changes as stated above and the fact that the trading volume of its ADSs on the NYSE accounts for only a small fraction of the total trading volume of its shares. Therefore, the Company has decided to apply for voluntary delisting of its ADSs from the NYSE and for termination of registration of its ADSs with the U.S. Securities and Exchange Commission (the “SEC”) under the Exchange Act.
It's about what we expected. Financially, it just doesn't make sense for Konami to remain listed on the NYSE. Simple as that. Still, the move is a bit disconcerting given all the drama surrounding the company. With the removal of Hideo Kojima (creator of the Metal Gear series) and the cancellation of Silent Hills, things are looking a bit shaky over there.
