ZDNet

Investor services firm Moody's has reclassified the ailing electronics firm to one point above junk status.

Shrinking consumer demand for electronics has resulted in the Japanese firm's long-term debt rating being lowered one notch, according to Reuters.

Moody's Investor Service now considers the firm applicable to the lowest investment grade level possible before hitting "junk status". Once a company hits this grade, otherwise known as a "BB" rating or "high-yield bond", any investment made is high-risk by default -- something which could impact the company's plans to restructure and recover. 

In October, the investment firm began downgrading Sony's status, believing the electronics maker's prospects, despite restructuring efforts, remained negative.

If Sony's rating is cut by one more point, some funds may be forced to offload debt, and the firm may find itself restricted in how much money it would be allowed to raise in credit markets. 

"Without robust restructuring in the coming 12-18 months, Sony's non-financial services businesses will at best achieve roughly break even, and are also at risk of remaining unprofitable," the rating agency said in a recent report.

Sony's Q2, ending September 30, resulted in an operating profit of $388 million, in comparison to a $20 million loss in the same quarter within FY2011. The ailing electronics maker made a loss of $5.7 billion last year and $312 million in the first quarter.  

As part of restructuring efforts implemented by CEO Kazuo Hirai, the electronics giant plans to close a number of offices within Tokyo, Japan, has created a voluntary retirement program for employees and the eventual dismissal of 10,000 workers from its global workforce. 

http://www.zdnet.com/sony-rating-lowered-to-one-point-above-junk-status-by-investors-7000007163/

Guess Sony can't take out a loan anymore or else the interest alone will ruin them. They are truly on their own now.

This just keeps getting worse and worse.

wow, again? (and already?)

I'd say so with the upcoming holiday season and their restructuring efforts. Sony is hitting the bottom and a full recovery on their part might bring some decent returns. Though risky.

Nintendo can perform a hostile takeover soon, once and for all getting their revenge on Sony over the whole CD drive thing.

(yes, not serious)

Pretty weird. To me it looks like that Sony is pretty much the only Japanese electronic company that is turning itself around. They saw that economy crash will continue for years and strong yen is more permanent condition and started to downsize and are actually coming back to profits this fiscal year after years of huge losses. At the same time Panasonic and Sharp are losing billions because they thought that this economy crash/strong yen would go away in couple of years.

Nintendo just recently made a big acquisition, I don't think they got that much cash to spare in the moment.

Why would it yield high returns, though?  What evidence is there to back that up, especially since Moody's rating here (which is Moody's investors, not investors as a whole) basically says that Sony is not likely to be able to pay back money that is loaned to them?  Isn't that going against exactly what they're saying here?

Anyway, this is particularly bad news coming into a holiday season.  There must be feelers out there that don't bode well for holiday sales for Sony's product portfolio.  If that happens, then junk status may be inevitable.  And at that point ...

But junk status isn't the end of the world.  Nokia had junk status in June and they're still kicking .......

i can't go to that link due to my work blocking the site.  summary?  i'm not sure what acquisition you speak of.