Sony not doing well financially

Sony is a big corporation, but it seems that they cannot find the funds to grow their imaging business. After their stock hit 32 years low and its credit rating was cut to near-junk status, the company decided to sale convertible bonds in order to raise 150 billion yen ($1.9 billion) for their imaging division.

Sony recently invested around $650 million for a 12% share of Olympus.

Via The Verge

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  • Mike

    “Sony is a big corporation, but it seems that they cannot find the funds to grow their imaging business. ”

    This makes no sense. Sony spent $650 million on Olympus and raised almost $2 billion for further investment in its business.

    These actions are the very definition of “finding” funds to grow their business.

    Don’t forget, Sony generates roughly $80 billion in revenue annually. Eighty billion U.S. dollars.

    This is a “problem” others would like to have.

    • oldbean

      “This is a ‘problem’ others would like to have.”

      Well, go buy some cheap Sony stock. Then it is your problem.

      • Not Surprised

        Actually, its probably an EXCELLENT time to pick up Sony stocks. Although they have been taking a beating from Samsung & LG (in many categories, the imaging side is doing very well. Since they spent half-a-billion dollars in investments, its no wonder their stock went down. Its only on seeing returns that it will go up. Of course, if you invest on the upside, then you aren’t really an investor at all. Review Sony’s fundamentals in its imaging department, determine if Sony cameras are doing “the right thing” and if you more and more will consider them — then invest, if you think they are doing a good job and investing in the right places. On the other hand, if you are just someone who invests in brand names without knowing about Olympus or Sony imaging quality, that’s why you would be pulling out right now. Its not likely Sony will die — so investing when its low could be a very good idea.

        • Ron

          You might want to take a look at their balance sheet. It’s not about imaging, it’s about $11 billion of tangible net assets including $77 billion in long-term investments. Those “investments” are in Sharp (losing tons of money), Olympus (losing money) and whatever is left of Sony-Ericson. It’s rated junk because it’s effectively pissed away a fortune on losers and owes a lot of money used to finance the deals. My guess is Sharp will cause a write-down of the investment value and Sony will be bankrupt.

          You don’t mismanage a dominant position for decades and expect to survive.

          • anaveragejoe

            “You don’t mismanage a dominant position for decades and expect to survive.”

            HP has done exactly that with a long string of losing CEO’S all making many millions for foolish mergers and incompetence by destroying stakeholder wealth and security – i.e. shareholders and employees. CEO losers should never become compensation winners while the owners and others take a bath, but too often that’s become the American crony capitalist way.

      • Marc Medios

        Oldbean, you have two things mixed up. Share prices are produced by private transactions… they have nothing to do with Sony

  • JessyP

    Folks, don’t get your financial news from a rumors site. Go to Forbes, CNN, anybody else.

    • The original link on The Verge is from Bloomberg.

    • Sahaja

      Sony and Panasonic have both have had their credit ratings downgraded to “junk” status:
      which means the ratings agency feels there is a strong likelihood they will default.

  • aekn

    Don’t worry, Sony is too big to fail! 😉

    • juno

      Someone from Polaroid and Kodak said that once upon a time…

    • juno2

      I’m sure someone from Polaroid or Kodak would disagree with you….

    • justjohn

      So is the USA
      We will all be speaking Chinese in 10 years.

      • BdV

        Or… it’d also be interesting to hear what languages they’ll be speaking in different parts of China in 10 years…

  • Stepper

    Maybe this will knock some humility into Sony. One of Sony’s biggest problems (at least in my mind) is that they think they are so huge that they can impose their own proprietary systems and expect the people to have no other choice but accept the new Sony standard.

    I have decided a long time ago that I will never again subscribe to another Sony proprietary product unless it has been largely accepted as a common standard.

    • ” they think they are so huge that they can impose their own proprietary systems and expect the people to have no other choice but accept the new Sony standard.”

      Well, it works for Apple, doesn’t it? 😀

      • Yeah, but Apple focuses on user experience and Sony focuses on electronics. That’s why Apple usually delivers good technology which is great to use and Sony great technology which is often a hassle to use.

        • Not true. Some of Apple’s best selling products are not better, if not worse, than the competition.

          Saying someone else’s tech is harder use and therefore it’s not good is another way of saying they beat you.

          Remember back in the day all that Nikon users had to say was how difficult Canon’s menus are? No one says that anymore because now Nikon’s grown up where it counts.

  • BdV

    Could be that the Chinese islands discussion is also not exactly helping, now at a stage where it’s a bit late for Japan to just say ‘OK, never mind, forget about it.’ So, what’s next? Complete Japanese bankruptcy or war?

  • The news has very small connection with the Sony digital imaging division. Sony is such a huge company that cameras provide very tiny if any impact on their overall shares. Sure enough, the bad economical situation would force Sony to close some of the unprofitable divisions, but in striking contrast with Kodak and Polaroid, all the available money would be used to keep alive any branches which can be profitable in the future and stimulate the faster research and development.
    We already could see how it affects the Sony digital camera division. Struggling to survive within the giant Sony corporation, their camera division is trying to release as many camera models as possible flooding the market with hastily designed products and leaving to the customers the choice.

  • mike_tee_vee

    I hate how good fundamentals do not always reflect well in a company’s stock price. Take Apple for example. Big margins, huge market share, clean balance sheet, and growing revenues, yet the PE ratio is absurdly cheap and falling by the day.

    • fjfjjj

      So you hate that Apple’s management shake-up, disappointing current level of innovation, and supply chain problems are reflected in the stock price? Tough cookies.

  • MB

    I am not an expert in financials as some people here claim to be but if imaging business is what’s killing Sony than it is no big surprise to me.
    In my opinion they just don’t know how to handle it and treat it as a commodity product like TVs so they are throwing away huge sums of money on development a new camera model every couple of months so customers become confused and really in doubt if what they already have is some no good product needed to be replaced as soon as possible and the thing is people have to have time to fall in love with a camera.
    Sony is pushing SLT but it is currently just not as good as optical viewfinder no mater how new and advanced technology they put in (and calling it translucent is just plain wrong) and the thing is that they are actually reducing the potential NEX customers with it and not gaining any from Canon and Nikon.
    On the other hand they really do not understand that accessories (lenses, flashes …) is what the game is really about and where the money is and they are not pushing it enough.

    • GR

      actually the imaging part is doing just fine, on the other hand the TV section did loose a ton of money.. and maybe SLT does not work for you and many others but i love how Sony takes their own path and actually innovates.

  • Marc Medios

    I think you guys should stick to photography. The stock price of a company is not an indicator at all of how well it is doing financially. Remember that stock is “traded”; after the IPO or the share emmission, NONE of the money bought and sold on shares is returned to the company (unless the company is doing a buy back). If you want to understand how well or badly a company is doing you could look at sales, share, product output, output/person, margins, net profit… a bunch of things but NOT share prices.

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