Why is Nidec stock plunging today?

Nidec's share price plummeted by 17.2% to ¥1,949 on Thursday, following auditor PwC Japan's third consecutive refusal to express an opinion on the company's financial statements for the fiscal year ending March 2026. This decision, known as a disclaimer of opinion, stems from PwC's inability to gather adequate audit evidence. The lack of a clean or qualified audit sign-off could potentially lead to Nidec losing its Tokyo Stock Exchange listing, as listing requirements mandate a clear audit outcome.

Investors swiftly reacted with significant selling, driving the stock down to ¥1,888 at one point during the day. Adding to the shock, Nidec disclosed a record net loss of ¥564.6 billion for fiscal year 2026, marking a reversal of the ¥84.6 billion profit seen in the previous year. The company reported ¥632.1 billion in total impairment losses and ¥330.9 billion in extraordinary losses linked to confirmed accounting misconduct across various locations within its group.

Analysts, including those at Citi, had previously cautioned that the ongoing audit issues would continue to weigh down the share price. Furthermore, Nidec remains on the Tokyo Stock Exchange's list of securities under special alert, with a critical internal control deadline looming at the end of October. The company admitted to lapses in internal controls and announced a series of measures to rectify these issues.

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