Stock Price Appreciation Multiples Required for Growth Companies on the Verge of Delisting

AK0032 (The title of this article was changed on July 15. The content remains as it was on July 10.)
Many growth companies on the verge of delisting (those in the improvement period) lack sufficient market capitalization. Specifically, these are companies with a Free-Float Market Capitalization (FMV) of less than 500 million yen, or companies that have been listed for over 10 years with a Market Capitalization (MV) of less than 4 billion yen. Of the 24 growth companies on the verge of delisting, 15 fall into this category. Note that the stock price used to calculate FMV or MV is the value calculated from the average of daily closing prices for the three months preceding the company's most recent fiscal year-end.

For example, the following growth company stated in a timely disclosure on June 25 that as of the end of March, its MV was 1.001 billion yen (falling short of the 4 billion yen requirement) and its FMV was 381 million yen (falling short of the 500 million yen requirement), and it has therefore entered the improvement period.
https://image-inf.co.jp/wordpress/wp-content/uploads/2025/06/timelydisclosure_20250625_3.pdf
This disclosure document also reveals that the Free-Float Ratio (FS) is 38.0%.

The market capitalization of this company as of July 9 is 1.052 billion yen, according to general web investment information services. Therefore, the most recent FMV is 1.052 × 38.0% = 400 million yen. To reach the 500 million yen standard, the stock price must increase by 1.25 times (assuming no change in FS). Furthermore, to reach a market capitalization of 4 billion yen, the stock price must increase by 4 ÷ 1.052 = 3.80 times. To satisfy both criteria, the stock price must increase by 3.80 times.

We examined the distribution of stock price appreciation multiples required for 15 growth companies to meet the market capitalization scale criteria, and the results are shown in the following graph.

There are 3 companies for which the required stock price appreciation multiple is less than 1. These companies are considered to have achieved the FMV standard based on the instantaneous wind speed as of July 9 (assuming the FS remains the same as in the most recent timely disclosure).
To meet the market capitalization scale criteria (assuming the FS remains unchanged), it appears that a stock price increase of 1 to 3 times is required. Only one company required an increase of 3 times or more.
Please note that these companies must have an FMV of 500 million yen or more and an MV of 4 billion yen or more, calculated from the average of daily closing prices for the three months preceding the next fiscal year-end. (End)

For basic knowledge to better understand the content of this article, please see my following article.
How to Read the "Weekly Delisting Candidates" Report | Aoba no Komorebi

[Note] This article provides perspectives on the analysis of listed companies and does not in any way constitute a recommendation to buy or sell specific stocks or provide investment advice.