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Starbucks Debuts on Tokyo Stock Exchange, Sega Announces Alliance with Microsoft - 2001-10-12


The Japanese subsidiary of the American coffee shop chain, Starbucks, debuts on the country's stock market and Japanese game company Sega announces a link-up with Microsoft.

Japan has proven to be the most successful market in the world for U.S. coffee company Starbucks, with two new outlets opening somewhere in the country each week. The firm's stock began trading on the Japanese market Wednesday, in the first overseas listing for the firm.

On its first trading day, the stock rose as much as 30 percent from its initial offer price, but by Friday it closed just a fraction above it. Many market watchers say that the stock is overvalued, even though Starbucks is very popular in Japan.

Analyst Hideki Sakurai of Nomura Securities says he remains a believer in the stock's long-term future. He says Starbucks Japan has the potential to do well in its business performance, and the company's stock performed better than expected when it first hit the market. He adds that Starbucks will increase its profits as it opens more outlets in Japan.

Starbucks opened its first store in Japan five years ago and has grown to nearly 300 stores. It hopes to open another 200 by 2004.

Asia's largest airline, Japan Airlines, said Friday that it expects to post a loss for the business year ending in March. The company said the loss is due to higher insurance costs and slowing ticket sales in the wake of last month's terrorist hijackings in the United States.

The airline has revised its fiscal year outlook to a $320 million loss from the $200 million profit it had predicted earlier.

Two alliances were announced this week in Japan's highly competitive electronic games industry. Japanese game maker Sega on Friday unveiled a deal with software giant, Microsoft. The two will jointly market personal computer game software in the United States. Sega officials say they are eager to increase their sales of games played on personal computers.

Meanwhile, Sony's game-making unit says it will inject about $120 million into a Japanese game software company called Square. The move allows both companies to work together to develop online products, including games for Sony's best-selling PlayStation-2.

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