Is Honda Motor Co., Ltd. Sponsored ADR (HMC.US) the one benefiting most from the merger? Investors are choosing to sell Nissan Motor.

Notice that due to market speculation on the proportion of shares to be transferred in the planned trading between Nissan Motor Co., Ltd. and Honda Motor Co., Ltd. Sponsored ADR (HMC.US), Nissan Motor Co.'s stock price is expected to experience its largest drop since August. Nissan Motor Co. plummeted by 15% on Friday, marking its biggest intraday drop in 26 years, before slightly rebounding to 10% at 2:17 PM Tokyo time. By trading volume, Nissan Motor Co. was the most traded stock in the Japan's benchmark TOPIX index on Friday. Since the news of a potential collaboration between Nissan Motor Co. and Honda Motor Co., Ltd. Sponsored ADR came out, the stock has been fluctuating, soaring by over 23% on the day of the news release on December 18. Data shows that Nissan Motor Co.'s 30-day historical volatility has surged to its highest level in 16 years, with its 14-day relative strength index reaching 81.6 after recent gains, surpassing the threshold indicating excessive gains. From December 18 to December 26, Nissan's stock price surged by nearly 64% as the market hoped the deal could save its struggling business. Even with the sharp drop on Friday, Nissan's stock price still rose by 10% this week. According to data compiled by Bloomberg, trading volume was more than 400% above the three-month average. However, the stock's rise made it vulnerable to selling, especially as investors turned their attention to the terms of the deal with Honda. The two automakers announced on December 23 that they would determine the ownership ratio of the planned joint venture company based on their respective stock prices. Citi analyst Arifumi Yoshida wrote in a report on December 23, "Nissan's stock price surged on hopes of a rescue, but progress in turning the situation around is a condition for the merger, so we believe the stock could be temporarily sold off." The analyst wrote that the restructuring costs for Nissan in the future could also impact the merger ratio. He stated that based on the market values of Honda and Nissan over the past six months, the initial ratio would be 5:1. Nikkei newspaper released an analysis report on Friday morning, estimating the ownership ratio between Honda and Nissan to be 5:1.