The ADRs of Nikko Cordial (NIKOY/OTC) had largely recovered recently. But expect them to sink again. News broke in Japan that an inquiry has blamed Nikko management for a fraud that may cost the company its Tokyo stock market listing:
Shares of Nikko dropped by their maximum 200 yen limit to 1,184 yen today, after the Tokyo Stock Exchange said it will use the probe's findings to determine whether to delist the company. The stock probably will fall further as sell orders outweigh buy orders by 60 to 1, according to data compiled by Bloomberg.
I'm not dumping my ADRs. I wouldn't recommend anyone selling their Nikko Cordial ADRs or ordinary shares (if they bought in Japan). If you follow Controlled Greed.com, you bought Nikko at a great price back in 2005, and took partial profits later.
I first thought the company wouldn't get delisted. Now I'm wondering if a delisting followed by a HUGE stock price plunge would prove to be an excellent buying opportunity. It would depend on the value of the business remaining intact, scandal aside. Let's stay tuned.