Big Money, Day Traders Both Love Japan Tech Darling Mercari

(Bloomberg) — Mercari Inc., the online flea-market operator that has become one of Japan’s most closely watched tech ventures, is closing in on new highs as the stock has drawn both big and small money.

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The company has already grown to command the largest weighting on Japan’s startup-focused Mothers index as individual investors buy in — of some 230 of the largest Japanese companies with market value of over $5 billion, Mercari has the third-highest percentage of individual shareholders. Then on Oct. 7, Los Angeles-based money manager Capital Group declared it had taken a 5% stake in Mercari.

That’s helping propel the stock to near the 6,000 yen mark it hit just once, on the day it listed to great fanfare in 2018. After a rapid decline, the stock has worked its way back up this year, fueled by its first quarterly operating profit. That’s been helped by the coronavirus pandemic, which has boosted usage of its online marketplace where users buy and sell items.



graphical user interface, chart, histogram: Mercari shares are nearly back to the post-IPO pop


© Bloomberg
Mercari shares are nearly back to the post-IPO pop

Mercari fell 0.2% in Tokyo on Tuesday. A gain of just 3.3% in the next trading session would see it match the 6,000 yen high.

Mercari is something of a rarity in Japan, which has few tech startups that have swelled to the size of the $8.6 billion company, according to Ikuo Mitsui, a fund manager at Aizawa Securities Co., who is still bullish on the firm after the share surge.

“In Japan there are very few companies like this, light on assets and not requiring large-scale capex,” he said. That’s why many are piling onto the stock, he added.

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