To commit a mistake and not correct it is to commit another mistake, opined Confucius. Hon Hai’s chairman Terry Gou should take note. The company’s proposal to buy Sharp seemed flawed. The revised deal — to buy control — is better but still leaves many important questions unanswered.

Yesterday, Sharp said that it would raise $3.5bn by selling common shares to Hon Hai, raising a further $900m from a tranche of preferred shares. The deal, done at a one-third discount to the previous close, would give Hon Hai two-thirds of Sharp’s equity, with an option to convert the preferred shares in or after July 2017 for a further 5 per cent stake.

Sharp’s shareholders had been expecting that the company would be sold in its entirety for roughly double its market value (or its market value plus the value of its debt; it was never clear which). This prospect had lifted the shares as much as two-thirds from their January lows. News that Sharp would stay independent sent them down 14 per cent.