Aggressive investor Effissimo acquires a 2.5% stake in Nissan, causing the stock price to hit its biggest increase in 15 years.

On Tuesday, Nissan's stock price saw its biggest surge in 15 years, as the struggling Japanese automaker disclosed that a activist investor now holds a 2.5% stake in the company. This sharp increase reversed the downward trend of Nissan's stock price. Last week, Nissan announced job cuts and plans to reduce its production capacity by one-fifth, leading to a sharp decline in its stock price. In addition, Nissan also downgraded its financial guidance for the current fiscal year. Documents submitted by Nissan stated that Suntera (Cayman) Ltd. is the buyer of the 2.5% stake, and Suntera is listed as the trustee of the ECM Master Fund. In a 2021 filing, Sanken Electric Co. noted that ECM Master Fund is managed by the Singapore-based hedge fund Effissimo Capital Management Pte. Effissimo and Suntera are known in Japan for leading a campaign against Toshiba in 2021, which ultimately resulted in the acquisition of Toshiba. Nissan stated in a statement that the company is "continuing to engage with institutional investors and securities analysts." The company added that it cannot confirm if this equity acquisition was indeed completed by Effissimo. Boosted by this news, the automaker's stock in Japan surged by as much as 20.6% at one point, before settling to around 13%. Founded by former colleagues of Japanese activist investor Yoshiaki Murakami, Effissimo became Toshiba's largest shareholder in 2017, as the company struggled with significant write-downs in its nuclear power business. Representatives of Effissimo did not respond to requests for comment via email. Over the past decade, activist investor movements in Japan have become increasingly common. Elliot Investment Management has holdings in Sumitomo and SoftBank Group, while Oasis Capital earlier this year called for governance reform at Japanese drugstore chain Ain Holdings Inc. Ikuo Mitsui, a fund manager at Aizawa Securities Co., stated that if activist investors were to get involved, Nissan's stock price could see further increases, as shareholders speculate that Nissan might embark on structural reforms to fix its struggling business. According to S&P Global data, as of last Friday, Nissan's short positions accounted for 21% of its outstanding shares, making it the third most shorted stock in the Nikkei 225 index. With sales declining in the Chinese and American markets, Nissan announced a plan last week to cut 9,000 jobs and 20% of its global production capacity. Furthermore, Nissan also stated that it expects its operating profit for the fiscal year ending in March to drop to 150 billion yen ($9.76 billion), a 70% decrease from previous estimates. Management also revised their revenue outlook down by over 9%, meaning they now anticipate little to no growth in revenue for the year. Nissan CEO Makoto Uchida told investors that the challenges Nissan faces are "not just external, but also our own issues," hinting at both the rapid rise of Chinese automakers and Nissan's overly ambitious sales targets.