- Rakuten’s shares jumped 10% on Wednesday as investors looked forward to Pinterest’s public debut, cheered registrations for its new cryptocurrency exchange, and celebrated an analyst upgrade.
- The “Amazon of Japan” invested in Pinterest in 2012, but its shareholding seems to have fallen below 5%.
- Rakuten plans to launch a cryptocurrency exchange in June, after buying a local exchange last fall and a Bitcoin-payments processor in 2016.
- Watch Rakuten trade live.
Rakuten’s shares jumped 10% on Wednesday as investors bet on a strong public debut for Pinterest on Thursday. The e-commerce, online banking, and communications titan – nicknamed the “Amazon of Japan” with a market cap of ¥1.5 trillion ($US13.6 billion) – invested in the digital scrapbooking start-up in 2012.
Shares in Japan’s largest e-commerce site likely benefited from Daiwa Securities slapping a “buy” rating on the stock, said Hiroko Sato, an equities analyst at Jefferies. Rakuten’s recent opening of account registrations for its Rakuten Wallet cryptocurrency exchange, scheduled to launch in June, may also have boosted sentiment.
Rakuten invested upwards of $US50 million in a $US100 million funding round for Pinterest in 2012, according to AllThingsD. Its co-investors – Andreessen Horowitz, Bessemer Venture Partners, and FirstMark – took part in a further $US225 million investment round in 2013 without Rakuten.
However, the Japanese group co-led another funding round of $US186 million in 2015, according to Pitchdeck data cited by Observer. It invested in Pinterest with the idea of enabling Rakuten customers to purchase items they see on the website. The company appears to have fallen below a 5% shareholding, as it’s not listed with its original investment partners as “principal stockholders” in Pinterest’s IPO filing.
Pinterest plans to price its shares between $US15 and $US17, valuing the business below its private valuation of $US12 billion in 2017. Rakuten investors will be hoping its shares soar, generating a return similar to Rakuten’s $US990 million gain on its investment in Lyft, which went public at the end of March.
Rakuten – which owns WhatsApp-rival Viber – acquired a local cryptocurrency exchange called Everybody’s Bitcoin last fall. It snapped up the assets of San-Francisco-based Bitnet, a specialist in processing Bitcoin payments, in August 2016. It plans to begin accepting cryptocurrency payments across its global marketplaces this summer.
The Japanese giant already operates an online bank, issues credit cards, and runs payment apps. It reached 7 million bank accounts and handled 15.4 trillion yen ($US140 billion) in global transactions in 2018, according to the company’s fourth-quarter earnings presentation.
Its revenue grew 17% to ¥1.1 trillion ($US9.8 billion) as sales rose in both its internet services and financial technology divisions, sending net income up 28% to ¥142 billion ($US1.3 billion).
Rakuten may be largely unknown in the US, but its stakes in high-profile start-ups like Pinterest and Lyft, embrace of cryptocurrencies, and continued growth mean it shouldn’t be ignored.
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