Japan’s Rakuten Prepares to List Its Securities Unit

Min Jeong Lee, Bloomberg News

The Rakuten Inc. logo is displayed on a glass door while a customer looks at a smartphone inside the company's cafe in Tokyo, Japan, on Monday, Jan. 28, 2019. Rakuten's chief executive officer Hiroshi Mikitani says the company is aiming to lower prices in Japan's wireless market. Photographer: Kiyoshi Ota/Bloomberg , Bloomberg

(Bloomberg) -- Rakuten Group Inc. said it’s preparing a listing for its Rakuten Securities unit as the Japanese company diversifies beyond e-commerce.

The company said a listing for the securities business would help it expand the ecosystem for Rakuten offerings, which range from e-commerce to finance and wireless services. The date of the prospective listing has not yet been set.

Hiroshi Mikitani, the company’s chief executive officer and founder, has been expanding Rakuten’s businesses while facing competition from Amazon.com Inc. in its core e-commerce operation. The US online retailer has invested heavily in Japan as one of its key overseas markets.

Mikitani has made an enormous wager on wireless services by building a fourth mobile network in Japan to compete with leaders NTT Docomo Inc. and SoftBank Corp. Rakuten’s operating loss tripled in the first quarter from a year earlier, missing analyst projections.

Some analysts see potential for the company to cut losses in mobile in the quarters ahead however, and then boost revenue by cross-selling financial services and other offerings to its customers.

“Their percentage of users who use two or more services reached a record high of 74.8%,” Amir Anvarzadeh, an analyst at Asymmetric Advisors, wrote last week. “This is precisely why we think those who value the mobile unit purely as a stand-alone one miss this crucial fact and the importance of the mobile interface in selling many other services.”

Rakuten shares were little change on Tuesday. They had dropped 34% this year through Monday’s close.