The Nikkei reported on June 28 that an analysis of Kioxia's public documents revealed that these employees, who received stock options in the past, are estimated to have realized significant profits.
Kioxia, formerly known as Toshiba Memory, was acquired in 2018 by a consortium led by U.S. private equity firm Bain Capital. Following the acquisition, Bain Capital granted stock options not only to executives but also to mid-level managers, including department heads and section chiefs.
Typically, stock options are primarily awarded to executives during private equity buyouts. However, Bain Capital's decision to extend stock options to a broader range of employees is seen as a strategy to boost morale among the crucial middle management layer in Japanese corporate culture, according to the Nikkei.
Based on the available data, it is estimated that around 600 employees received stock options, most of whom are regular staff. The exercise price of these options ranged from 1,667 to 2,600 yen per share. When Kioxia went public on the Tokyo Stock Exchange in December 2024, the initial offering price was set at 1,455 yen per share.
However, as expectations for a recovery in semiconductor demand driven by increased AI investments grew, Kioxia's stock price surged. On June 22, the company's shares reached an intraday high of 112,700 yen.
The Nikkei calculated that the 7 million stock options originally granted are now valued at approximately 79 billion yen based on this stock price, with the unrealized gains amounting to about 77.8 billion yen. Dividing this figure among the estimated 600 beneficiaries results in each receiving over 1 billion yen in pre-tax valuation gains.
Meanwhile, Kioxia's performance is also improving rapidly. The company has reported record-high revenues and net profits for two consecutive years, and its net profit for the second quarter of this year (April to June) is projected to reach 869 billion yen, a 47.5-fold increase compared to the same period last year.
* This article has been translated by AI.
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