What Caused Sony’s Tumble to 31-Year Low?
Sony Corporation’s (NYSE:SNE) stock fell to a 31-year low in response to the company’s record annual loss of 456.7 billion yen, or $5.7 billion, reported on Thursday.
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Though the firm appears to be confident of returning to the black this current financial year, investors share little of that optimism. “Sony is facing a lot of difficulties and the new president has not been able to produce a clear plan as to how he will turn around the company,” said Yuuki Sakurai of Fukoku Capital Management.
Sony has been plagued by a series of problems across its businesses over the past few years. Tough competition and cooling prices have mauled profits at its once profitable TV division. Competitors have also taken over market share in the gaming and mobile phone sectors. Most important, innovation and product development appear to be on the back foot, a serious handicap for a consumer electronics business. Rising costs and a strong yen have not helped.
In such a bleak situation, new incumbent Kazuo Hirai has a challenging task ahead of him, and plans to cut more than 10,000 jobs in a major restructuring.
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