Nissan Shares Continues To Fall On Concerns Over Honda’s deal

Nissan Motor Co. shares slid, heading for a two-day 13% drop, on concerns that the terms of the automaker’s planned deal with Honda Motor Co. would give investors a smaller stake in the proposed joint holding company.

Shares fell as much as 6.7% on Monday in Tokyo. After initially rising more than 60% on Dec. 17, the day before news of the deal was announced, the stock fell on Dec. 27 as investors turned their attention to the initial terms of the Honda-Nissan merger. The stock was also vulnerable to profit-taking in the final trading session of the year.

The struggling Japanese automaker intends to establish a joint holding company with Honda in August 2026, according to a Dec. 23 statement. The exact terms of the arrangement have yet to be decided, but the share transfer ratio will take into account the automaker’s share prices, according to the companies. A Dec. 27 Nikkei report estimated the Honda-Nissan share ratio at 5:1.

Disappointment among investors who had hoped for a more favourable ratio for Nissan may have prompted a sell-off in its shares, said Kazuhiro Sasaki, head of research at Phillip Securities Japan.

“Investors are adjusting positions and taking profits before the end of the year, and Nissan was recently acquired, so it will be part of that,” Sasaki said. Nissan’s financial situation is causing concern among investors, he added.

Despite the short-term boost that news of the Honda deal may have given Nissan’s share price, global funds’ position in the automaker remains low, said Steven Holden, founder of Copley Fund Research.

“The sentiment is very bad,” Holden said. “There’s very little positive activity around Nissan, in terms of opening and closing positions.” Holden sees Nissan as one of the big losers in the worldwide trend away from automakers and toward big tech among global funds heading into 2025.

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