(Bloomberg) — Fuji Media Holdings Inc. has had an abysmal start to 2025. The broadcaster’s reputation is in tatters as a sexual harassment scandal involving one of its most famous TV hosts has dominated the news in Japan. Advertisers have fled, the company has slashed its earnings forecast, top executives have resigned in disgrace and it has become synonymous with corporate dysfunction, symbolized by a press conference from which television cameras and some media were banned. This was followed by a second briefing that stretched into an unprecedented 10-hour marathon during which journalists grilled management until 2 am. So it may come as a surprise that the company’s shares have surged 45% this year, making it the best-performing stock on the benchmark Topix index. The answer for the seeming disconnect is that investors see opportunity in the company’s disarray. In addition to being one of the country’s biggest broadcasters, it boasts prime real estate in Tokyo and Osaka. New leadership is expected to be more accommodating to shareholders and improve the firm’s corporate governance “Fuji Media has a fascinating array of businesses,” said Richard Kaye, portfolio manager at Comgest Asset Management. “People have been very excited about the opportunity of management change there.” The catalyst for the crisis at Fuji was a report by a local tabloid in December that a prominent TV host sexually harassed a woman. The star, Masahiro Nakai, acknowledged ‘trouble’ for which he reached an agreement with the alleged victim while saying violence was not involved. He subsequently retired from show business after the story broke. Rising Sun Management, which is the investment adviser to Nippon Active Value Fund, has been one of the most vocal critics of the company’s handling of the allegations. In a public letter, it called the broadcaster’s initial press conference ‘a virtual car crash’ and demanded the company set up a third-party committee to investigate what happened. NAV and Dalton Investments, which are both managed by James Rosenwald, together are Fuji’s third-largest shareholder. The rapid run up in the shares has also sparked speculation that other activist investors have targeted the company. Last year, activists set a record for investing in Japan, making it the world’s second-largest market for the strategy. In all, they bought at least ¥1.2 trillion ($7.7 billion) worth of Japanese stocks, according to data compiled by Bloomberg Intelligence. Real estate has been a major focus for the activists. Elliott Investment Management took a stake in Tokyo Gas Co. and pushed the company to sell down it property portfolio. Sapporo Holdings Ltd. came under similar pressure from 3D Investment Partners. Real estate is also at the heart of the fight between KKR & Co. and Bain Capital over Fuji Soft Inc. While Fuji Media is known for its iconic sphere-and-lattice headquarters in the Odaiba dist
The turmoil at Fuji Media attracts investors who are wagering on the potential of new leadership.
