Kioxia stock faces pressure as leveraged buying spirals out of control

Kioxia’s shares are under increasing downward pressure after margin traders amassed leveraged positions worth about 920 billion yen, the largest on the Tokyo Stock Exchange. Turnover has fallen dramatically, dropping 84 percent to 766 billion yen, which may force investors to sell at a loss when margin calls arrive. Market analysts describe the margin buying as “extremely bloated” and caution that retail investors could be compelled to dump shares as deadlines near.

While the stock has fallen 63 percent from its June peak, Kioxia’s earnings prospects stay robust, with net income projected at roughly 5.6 trillion yen and a forward P/E near 3.2. The company’s weighting in the Topix index will rise, potentially attracting about 2 trillion yen of passive inflows, but reduced volatility and a recent three-for-one split have done little to revive trading activity.