Rakuten Drops on $900 Million Deal to Buy Viber Message App.

Rakuten Inc. , the Japanese online retailer controlled by billionaire Hiroshi Mikitani, plummeted in Tokyo trading after announcing it will buy the Viber Internet messaging and calling service for $900 million.

Rakuten fell 9.5 percent, the most in more than four months, to close at 1,499 yen in Tokyo trading, wiping out more than $2 billion in market value.

Mikitani, seeking to boost sales after missing analyst estimates for two years, has bought stakes in social-network operator Pinterest Inc. and digital book seller Kobo Inc. Losses at overseas operations and new businesses are approaching levels that may test investors’ patience, Kuni Kanamori, an analyst at SMBC Nikko Securities Inc., said in a note.

“The deal is large and comes despite the absence of contraction in Kobo operating losses,” Kanamori wrote. “As we had hoped to see shrinking losses on M&A projects overseas, the deal leaves a negative impression.”

With Viber, Rakuten will be competing with Naver Corp. Line service and Tencent Holdings Ltd.’s WeChat, which both combine instant messaging with shopping and gaming, and Microsoft Corp.’s Skye service. Viber had a $29.5 million net loss last year, Rakuten said in a statement last week.
The share-price drop trimmed Rakuten’s climb in the past year to 83 percent, compared with a 26 percent advance for the broader Topix index.