Earlier today, we found out that the merger between Nissan (NSANY) and Honda (HMC) had been abandoned altogether thanks to a set of disagreements that neither side could overcome. As a result, Nissan is left to clean up the mess, a move which shareholders actually seem pleased with. Nissan shares are up over 2.5% in Thursday afternoon’s trading.
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The bad news from the post-merger action is that Nissan is looking for big losses this year, and without the Honda merger, will have little to backstop it. Nissan is looking for a net loss of around $519 million this year, reports note, and also dropped its annual operating income from 150 billion yen, about $979.4 million U.S., to around 120 billion yen instead.
That would be bad enough, but Nissan had previously offered guidance that looked for around 500 billion yen. Now, Nissan is left trying to pick up the pieces, but at the very least, it seems to have a plan to get itself back up and running.
The Plan
The immediate plan starts with cost cutting, and that inevitably means lost jobs. Nissan will be closing three factories outright over the next two years, along with cutting shifts at its plants in the United States. It also plans to double-decimate its executive ranks, firing one in five. But it also has its eye out for new partnerships that could be a help.
One of those new partners, reports note, may be Foxconn. Foxconn noted that it was not looking to acquire Nissan, but rather, to work with it instead. Foxconn has had an active interest in bolstering its electric vehicle business, and as such, it will need to work with a vehicle manufacturer to do that. Nissan happens to be one of those, and one that absolutely wants to work with just about anyone that will help keep the doors open and the lights on.
Is Nissan Stock a Buy or Sell?
Turning to Wall Street, no analysts currently carry a rating on NSANY, so we turn to the last five days of trading instead. Shares are down 1.3% over the period, and the pattern looks surprisingly familiar. Shares were mostly flat for the period in question, until the news about the merger falling through hit and sent shares into a comparative free-fall. Volatility, meanwhile, kicked in shortly after and ultimately left shares at the 1.3% down mark.
